National Economic Council (NEC) on Thursday disclosed that it has concluded arrangement to take upto N2 trillion from the Pension Fund under the National Pension Commission (PenCom) to finance critical infrastructure like roads, power and rail projects. This, according to the council, would take effect in the first quarter of next year.
Governor of Kebbi State, Atiku Bagudu disclosed this while briefing State House correspondents at the end the 100th NEC meeting presided over by Vice President Yemi Osinbajo at the Presidential Villa, Abuja. According to Bagudu, this was contained in the interim report by the sub-committee set up at the 99th NEC meeting which has the 36 State Governors and ministers with economic portfolios and the Governor of Central Bank of Nigeria, CBN.
He said, “You will recall that at the 99th NEC meeting, the NEC set up a sub committee to see how Pension funds can be used for infrastructure development as provided for by the Pensions Reform Act because up to 20% of the pensions funds under the current law can be used for infrastructure.”
“Last NEC meeting, there was a review of the performance of the Nigerian Sovereign Investment Authority and we are all impressed about experience they had gained in the last few years and their performance. And it was decided that a committee be set up on how we can leverage on that performance to create a platform where pension funds can be used for infrastructure development in a safe manner, so that they will earn long term returns for the pension funds while also helping to build Nigeria’s infrastructure.”
“So today (Thursday), the sub-committee presented an interim report where they advised on some of the issues that came up while deliberating. Of particular note was that other countries have been using the same mechanism – South Africa, Saudi Arabia and others have been using their pension funds and sovereign wealth authorities investment process to create platform for development. So, the committee reported and 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 and it is grossly inadequate. But with this mechanism maybe up to N2 trillion can be accessed and leverage upon. The NEC commended the committee for the interim report and the subcommittee promised that early next year there will be final report for the NEC to consider.”