Nigeria’s pension funds are intended for strategic investments, not to directly finance infrastructure projects, according to Wale Edun, the Minister of Finance and Coordinating Minister of Economy.
Edun’s comments, on Thursday, comes after recent proposals by the Federal Executive Council (FEC) to utilize a portion of the country’s N20 trillion pension funds for infrastructure development.
Edun emphasized the importance of adhering to regulations and safeguards designed to protect these funds, which represent the retirement savings of millions of Nigerians.
The Minister, in a video message posted on the ministry’s social media handle, stated that the Federal Government has no intention of improperly accessing workers’ pension savings.
“It has come to my notice that there are stories making the round that the Federal Government plans to illegally access the hard-earned savings and pension contributions of workers. Nothing could be farther from the truth. The pension industry, like most of the financial industry, is highly regulated. There are rules, there are limitations about what pension money can be invested in and what it cannot be invested in.
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“The Federal Government has no intention whatsoever to go beyond those limits and go outside those bounds which are there to safeguard the pensions of workers. Now what was announced to the Federal Executive Council, merely for noting, merely for information, no approval was sought for any action whatsoever, was that there was an ongoing initiative drawing in all the major stakeholders in the long-term savings industry, those that handle funds that are available over a long period.
“To see how within the rules, within the regulations and the laws, these funds could be used maximally, most effectively, to drive investment in key growth areas, infrastructure, housing, and of course, to find a way to provide Nigerians with affordable mortgages,” he stated.
While acknowledging the government’s aim to stabilize the economy amidst inflation, Edun stressed that the pension system is governed by strict regulations to ensure the long-term security of these funds. He assured that the government is not considering increasing risk or compromising the safety of these investments.
“No attempt whatsoever to increase the risk, no attempt whatsoever to lower the returns that would otherwise be earned, and we must remember that the federal government possesses the ability to provide guarantees where such are needed to unlock funding that would lead to growth, creation of jobs, and alleviation of poverty.
“It is an ongoing conversation, a challenge, a test, for the best and the brightest in the financial industry to come up with solutions that, whilst safeguarding the long-term savings, do provide an avenue that can help to boost growth in the economy,” Edun said.
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