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Market Digest Nigeria

Finance

Buhari’s plan to borrow N2trn From Pension Fund, is a threat to the scheme – NECA

Nigeria Employers’ Consultative Association, NECA, yesterday rejected reported plans by the Federal Government to borrow about N2 trillion from the Pension Fund to augment infrastructural development, saying it is a threat to the Contributory Pension Scheme, CPS.

This came as the association demanded immediate reconstitution of the board of the National Pension Commission, PenCom, dissolved five years ago by President Muhammadu Buhari. NECA in a statement by its Director-General of NECA, Dr. Timothy Olawale, the umbrella body for employers in the country, said “the idea of the pension fund of workers is to guarantee a meaningful and modest life after employment. It is, therefore, unacceptable for Government, for whatever reason, to dip into the funds without taking into cognizance the Regulations guiding investment of the Pension fund and consultation with Stakeholders.”

While expressing grave concern at the fate of the Nigerian workers in the face of incessant borrowing by Government at all levels without corresponding development, the NECA DG contended that “It is unthinkable for Government to borrow from the Pension Fund when the citizens have not felt the impact of the mounting debt of Government at all levels. What is paramount to contributors and other stakeholder alike, is the safety of the Fund, which, unfortunately, Government cannot guarantee. The action of Government has the potential to threaten the Scheme and erode Contributors’ confidence.”

“The Scheme is known as a Contributory Pension Scheme, involving contributions by Employers and Employees, without contributions from Government. One wonders why Government would take such a fundamental decision solely, without due consultation with representatives of employers and employees – who are key stakeholders and recognized by law to be on the Board of PenCom.

We call on Government to, without delay, reconstitute the Board of PenCom to enable the Commission perform its statutory role as enshrined in the law setting it up. We urge Government to stop without delay any discussion relating to the use of the Pension Fund as this is unnecessary, risky and unacceptable. While we support investment in infrastructural development, Government should utilize the recovered Abacha loot and other recovered/forfeited stolen funds into infrastructural development and not dip its hands into the Pension Fund”.

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