Minister of Power, Works and Housing Babatunde Fashola has urged the National Pension Commission (PenCom) and other operators to invest the over N5 trillion pension fund in construction of infrastructure.
He mentioned such infrastructure as roads, housing, Fourth Mainland Bridge, coastal road linking several coastal states from Lagos to Bayelsa and the new seaports in Lekki and Badagry.
The minister spoke in a keynote speech at the Nigerian Pension Industry Strategy Implementation Roadmap Retreat organised by the National Pension Commission (PenCom) and pension operators at the weekend in Abuja.
His paper was titled: “Overcoming the Challenges and Managing the Risks and Constraints that Inhibit the Investment of Private Capital and Funds in Nigeria’s Infrastructure Landscape to Make a Visible Economic Impact”.
He also recommended investment of the fund in refineries, such as Dangote’s, Ajaokuta Steel, petrochemical plants, resuscitation of textile mills; prisons to strengthen justice system and decongest prisons; hostels for universities, power plants for universities, especially those with teaching hospitals, health care and others.
To sceptics, who may be scared to invest pension assets in the real sector, Fashola said “diversification has forced itself on us as a nation and those investible vehicles exist”.
The minister said he could see a future of Africa, where Nigeria is leading in the use of people’s resources to build a future that includes the people.
He said he developed a topic from the challenges encountered by the pension regulator and operators in finding suitable investable vehicles to invest.
Fashola noted that the risks that stand in the way of the pension managers in investing the fund without any hitch were caused by some businessmen, who for their selfish reasons ensured that projects and contracts were tied down in courts.
He identified five areas that needed to be addressed to assure investors of low induced risks and these included politics, government’s action, socio-cultural, legal and judicial factors.
He stated that while the journey of a new pension system started with the coming together of some Nigerian minds like President Olusegun Obasanjo and Fola Adeola and was nurtured by the dedicated hands of men and women, it has reached a major milestone from where it must reinvigorate itself.
The minister, who said it was time to invest in the real sector, added that the biggest opportunity presented itself for the nation to act towards diversification rather than sloganeering it.
Fashola, who lamented infrastructure deficit in Africa, said: “This is the time to show that our nation and our national economy is bigger than the challenges posed by dwindling oil prices. This is the time to diversify and change the face of our economy. But the risks that stand in the way of investing the fund are caused by us and they must be changed by us.
“Perhaps, the appropriate starting point will be to acknowledge that pension reforms are just beginning to gain a foothold across most of Africa in jurisdictions as Nigeria, Ghana, Botswana, Kenya and Uganda, to mention a few.
“Perhaps the biggest and most advanced of the pension funds, especially in sub-Saharan Africa is the South African Pension Fund. But while the sizes of these funds are happily growing, and the number of contributors increasing, the impact in the quality of life on the continent is not yet anywhere near minimum globally acceptable standards.”
The minister advocated the adoption of a collective national attitude to make it possible to invest the over N5 trillion fund constituting the contributions of the nation’s working class into real sectors as a means of diversifying the nation’s economy and achieving inclusive growth.
He noted that the attitude that once mired pension funds management in scandals and lack of transparency, had led to stringent legislative interventions that limited the scope of activities that pension funds could participate.
Fashola acknowledged the amendments being made to address the situation.
