The National Economic Council (NEC) Thursday in Abuja announced the resolve of the federal government to borrow N2 trillion from the current N10 trillion pension funds to finance the development of infrastructure.
It also pronounced a national emergency on the power sector, noting that the federal government had pumped N1.7 trillion into the sector in the last three years with little or nothing to show for it. Briefing newsmen at the end of the NEC meeting in Abuja presided over by Vice President Yemi Osinbajo, Kaduna State Governor, Malam Nasir el-Rufai, said the decision to pull N2 trillion out of the pension funds was reached by a NEC committee that he is chairing.
El-Rufai said the committee presented an interim report on its assignment to the council and the decision to borrow N2 trillion from the pension fund was consistent with the Pension Reform Act 2004, which empowers the government to borrow 20 percent of the fund to address national issues. According to him, various countries of the world such as Chile and South Africa funded their infrastructure growth by borrowing money from workers’ pension funds.
He explained that with paltry N200 billion allocation for road construction and maintenance in the 2019 budget and N169 billion in 2020 budget, the country will never be able to address its road infrastructure deficit. According to him, highway infrastructure deficit can only be effectively addressed by long term funds such as pension funds. He said with the pension funds owned mainly by youths in their 30s who still have several years ahead of retirement, utilizing the funds for infrastructure would not generate any problem.
He said: “In 2019 budget, N200 billion was budgeted for construction and maintenance of federal highways. In 2020, the budget is N169 billion. If we continue this way, we will never be able to fund highway infrastructure. We need to unlock funds to construct and maintain highways.
“We will never be able to construct and maintain highways with N200 billion every year. Highway infrastructure and maintenance can only be done with long term funds.”
El-Rufai who said the committee had identified three areas where the pension funds would be invested, listed the areas as rail, road and power, adding that the borrowing would be done through bonds with private companies investing in road and rail infrastructure and paying within a period of 20 years. He also said another committee on power, also chaired by him, presented an interim report to the council on the status of owners of electricity distribution companies (Discos).
According to him, from presentations by stakeholders to the committee, they agreed that a national emergency was required in the power sector, which is facing structural problems. He stated that in the last three years, the federal government had invested N1.7 trillion in the power sector, despite privatization, adding that spending such a huge sum despite privatization meant that the exercise had no meaningful effect.
The governor said to address the endemic crises plaguing the power sector, the committee threw open consultations on how to fix the power sector challenges by inviting memoranda from the general public. In his own briefing, the Governor of Ondo State, Mr. Rotimi Akeredolu (SAN), said the council was briefed on emerging health matters in the country by the Minister of Health, Dr. Osage Ehanire.
According to him, the minister said Nigeria had been free from polio for some time and if the trend is sustained till June, the country will be officially declared polio free by then. He also said the minister spoke on the outbreak of Coronavirus in Wuhan, China, which had reportedly claimed 17 lives and infected over 600 people. The governor quoted the minister as saying that efforts would be concentrated on the prevention of the virus by engaging in screening at various entry points into Nigeria.
He also said the minister warned against the use of paracetamol and aspirin to cook meat, describing it as deadly because it can affect the kidneys of people consuming such meat. Also briefing, the Minister of State for Finance, Budget and National Planning, Mr. Clement Agba, gave balances in various accounts of the federation as at January 21, 2020.
According to him, while the balance in the Excess Crude Account is N321.3 million, the Natural Resource Account has N96.991 billion while the balance in the Stabilisation Account is N31.840 billion. Agba also said the deductions of budget support facility from allocations to state governments within five months amounted to N29 billion.