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The Nigeria Labour Congress (NLC) on Tuesday kicked against plans by the Federal Government to borrow N2 trillion from the Contributory Pension Fund of N10 trillion for infrastructural development.

Its President Comrade Ayuba Wabba, who spoke while addressing reporters during the meeting of the National Administrative Council of the Congress in Abuja, said the National Economic Council (NEC) had given approval to the Federal Government to borrow the cash from the pension funds to finance the development of national infrastructure.

He said the decision was devoid of effective consultation with the stakeholders who own the funds collectively.

The Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, has however, denied the report about government planning to borrow cash from pension funds for infrastructure.

Ahmed stated this in Lagos at Udo Udoma & Belo-Osagie (UUBO) second private equity summit with the theme: Drivers, Disruptors and Unlocking Value.

The minister said government was not borrowing the fund for infrastructure development.

Ahmed said what NEC has done was to set up a committee of itself to explore the possibility of being able to encourage the pension fund managers  to invest in infrastructure development.

“It’s not that the government is borrowing the pension fund. So, what we agreed now is to design a product that pension fund managers will fund attractive enough to invest in, that will give them free safe returns.

“Right now, the regulator, PenCom (Pension Commission), actually allows pension funds managers to invest up to 20 per cent of their money in infrastructure,” she said.

Wabba said the government must realise that pension funds is a joint contribution belonging to workers and employers, hence cannot be borrowed at will.

“Government need to be reminded, that the contributory pension scheme which came into being in 2004 is fully funded by workers and employers and its privately managed by Pension Fund Administrators (PFAs).

“The funds are in the individual Retirement Savings Account (RSA) of beneficiaries.

“The main objective of the scheme is to ensure that after retirement every worker in public or private sector, who had contributed to the scheme, receives his/her retirement benefits as at when due.

“It is important to stress that the N10 trillion pension fund is not warehoused in pension commission which is the regulator, the Central Bank of Nigeria, the Pension Fund Administrator or the pension fund custodian.

“The fund is warehoused in the private individual Retirement Savings Accounts of contributors, who are workers and beneficiaries.

“The guidelines on investing pension funds, which had the input of organised labour, pension union has the primary objective of adequate return on investment and the safety of the fund.

“The pension fund administrators are investing for maximum return on investment for the benefit of the beneficiary and not borrowing,” he said.

Wabba said the Pension Fund Administrators (PFAs) are to invest based on their risk and reward appetite; but usually in minimal risk entities.

He added that, they are not to be coerced or cajoled to invest because it is criminal to do so.

“It is curious that Labour as a critical stakeholder as provided in the Act was not consulted. It is equally a violation of provision of the Pension Act, five years down the line.

“The board of PenCom statutorily saddled with taking or approving decisions as weighty as this has not been constituted. PenCom is a very critical labour market institution.

”Our concern is further deepen by the fact that at the moment government’s indebtedness to pensions in accrued rights, pension differentials, minimum pension guaranty, pension increase, among others.

“These are in excess of N400 billion. Government has to be inclined to pay this debt,” he said.

He  urged the government to shelve its plan and not do anything that would undermine the integrity of the pension scheme.

Dr Ahmed said investment in infrastructure was not moving because it was easier for them to invest in Teasury Bills (TBs) and Federal Government bonds.

She said with returns on TBs not good, they were looking for long-term instrument they could invest in.

Ahmed said now, pension funds managers don’t have an opportunity to invest in Open Market Operation (OMO) anymore.

”We are actually working to design products which they can uptake and we are also considering, in addition to regulation, whether we should amend the Act to allow them do other things,” she stated.

On government borrowings, she said government was working very hard to reduce domestic borrowing.

“In 2015, the total government stock that we had was 80 per cent domestic and 20 per cent foreign.

“But we are gradually changing that; the debt management strategy is to move the ratio to 60 per cent domestic and 40 per cent external and now it’s 35 per cent external borrowing.

“This is to give room for private sector to borrow and to reduce cost of debt servicing,” Ahmed said.

Speaking on Value Added Tax (VAT) increment, Ahmed, who admitted that it would contribute to inflation rise, said it would moderate over time.

“When you increase any form of tax, it leads to inflation, but its a temporary thing; after some months it will moderate,” the minister said.

She said government would continue to support the development of SMEs for economic growth and development.

The minister also said that Finance Act would be a regular feature that would accompany the budget going forward.

Ahmed said that the next Finance Bill would be more consultative for more input.

http://www.nativereporters.com/labour-kicks-as-fg-plans-to-borrow-n2trn-from-pension-fund/

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The Inspector-General of Police, IGP Mohammed Adamu has on Sunday, placed Police Commands and Formations nationwide on red alert following the death of Iranian Army General, Qassem Soleimani

In a statement released on Sunday evening, the Spokesperson of the Nigeria Police, Frank Mba, disclosed that “This proactive measure follows Intelligence Report that sequel to the recent killing of an Iranian General Qassem Soleimani; some domestic interests are planning to embark on massive public disturbances and sabotage”

“Consequently, Zonal AIGs and Command Commissioners of Police have been directed to ensure maximum surveillance and security of lives and property across the nation”.

“The Police Commanders have been directed to ensure strategic deployments of both overt and covert Police operatives to ensure adequate security and safety of citizens, foreigners especially diplomats and diplomatic missions domiciled in Nigeria as well as the protection of critical national assets”.

“Meanwhile, the IGP has assured all Nigerians and foreigners resident in Nigeria of adequate security. He has equally warned all potential troublemakers to steer clear of the streets and territory of Nigeria”.

https://m.facebook.com/story.php?story_fbid=2539219993026618&id=1520288284919799

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One Naijeria

No Road. I live in that axis. It was Audio project. You can ask Seun Osenwa, his house is very close to my place.

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I just dey observe ni o, keep changing letters.

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