NEC eyes N2trn pension funds for roads, others

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The 100th National Economic Council (NEC), the last for the year, presided over by Vice-President Yemi Osinbajo is considering utilising close to N2 trillion of Contributory Pensions Fund on infrastructure development in the country.

This it intend to execute through the Sovereign Investment Authority.

According to the National Pension Commission (PenCom) total assets under the Contributory Pension Scheme has risen to N9.58 trillion as of the end of September this year

Governor of Kebbi State, Atiku Bagudu, who briefed State House Correspondents on their deliberations at NEC, said  government intends to follow the footsteps of other countries, including South Africa and Saudi Arabia, that have used a portion of their pensions for infrastructure development.

Bagudu said a sub-committee of NEC presented an interim report on the proposal, where they reported and identified potential road infrastructure, infrastructure in the power, rail sectors that can be funded through this mechanism.

The NEC which comprises state governors, Governor of the Central Bank of Nigeria, Minister of Finance/Budget/National Planning and other stakeholders in attendance, after reviewing the interim report, called for the submission of the final report in January, 2020.

Bagudu, stated that under the Pensions Reform Act, up to 20 percent of the fund can be invested on infrastructure. He said for instance that the sub-committee observed that only N169 billion was provided for roads in the 2019 budget, an amount described as “grossly inadequate.”

“So, the committee, in its report, identified potential road infrastructure, infrastructure in the power, rail sectors that can be funded through this mechanism.

“They noted that this year’s budget for example has N169 billion for roads across the Federation, which is grossly inadequate.

“But with this mechanism, maybe up to N2 trillion can be accessed and leveraged upon.

“The NEC commended the committee for the interim report and the sub-committee promised that early next year, there will be a final report for the NEC to consider.”

Another sub-committee of NEC chaired by the Governor of Kaduna State, Nasir el-Rufai, also submitted an interim report. The committee was mandated at the 99th NEC meeting to investigate the ownership structure of power Distribution Companies in Nigeria.

Bagudu explained: “You will recall also that at the 99th NEC meeting, NEC discussed that since the privatisation of the DisCos,  that at least 40 per cent that was meant to be for the state governments and federal government have not been so distributed. “Therefore, a committee was set up to review the status/ownership of those shares that have not been distributed and report back to NEC.

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