Nigeria’s National Economic Council, NEC, plans to leverage over N2trillion pension funds for critical infrastructure in the country.
Governor of Kebbi State, Abubakar Atiku Bagudu, gave the indication while who briefed the media after Thursday’s meeting of the NEC.
He said that this followed the progress report of the NEC Ad-Hoc Committee on leveraging a portion of the accumulated pension funds for investments in the Nigeria Sovereign Investment Authority, NSIA, at Thursday’s meeting of the Council.
Bagudu said that the Governor of Kaduna State, Nasir El-Rufai, who presented the report, noted that budgetary provision by both the federal and state governments fall short of funding required to address critical infrastructure projects in the country.
According to him, the allocation of N169 billion for roads in this year’s budget was grossly inadequate, necessitating that alternative source of funding be sought for infrastructure.
Bagudu said NEC, at its 99th meeting last month, set up the committee to see how pension funds could be used for the development of infrastructure as provided for in Nigeria’s Pension Reform Act.
“Under the current law, up to 20% of the pension funds can be used for infrastructure.
“Last NEC meeting, there was a review of the performance of the Nigeria Sovereign Investment Authority and we are all impressed with the experience they have gained in the last few years and their performance.
“It was decided that a committee be set up to see how we can leverage on that platform to create a platform where pension funds can be used for infrastructure in a safe manner so that they would earn long-term returns.”
Bagudu said the report noted that other countries like South Africa and Saudi Arabia have been using the similar approaches to fund their infrastructure development.
He said the final report of the council would be presented at the NEC meeting in January 2020.
Bagudu also gave update on the review of the status of ownership structure of the electricity power distribution companies regarding state governments as presented at the NEC meeting by Governor Nasir El-Rufai.
According to him, the update showed that the committee has started its work, but was awaiting information it requested from relevant ministries, departments and agencies to enable it to determine the endowment and extent of state government’s ownership in the privatized power sector.
“Council will await further action of Committees work, while resolving to also add representation from NEC to federal government’s ongoing review of the entire power sector privatization,” he said.
Governor Bagudu said that the Managing Director of the Niger Delta Power Holding Company made a presentation at the meeting on the status of the corporation options.
He said the NEC decided that the presentation be reviewed by the governors after which discussions on it would be held at the meeting of the Council.
Also at the briefing, Minister of Finance, Budget and National Planning, Zainab Ahmed, said deductions were ongoing for the repayment of the budget support given by the federal government to states and would continue as agreed.
She also gave updates on balances in Nigeria’s accounts as at December 19, 2019.
She said the balance in the Excess Crude Account was $324,967,933.72, while the balance in the Stabilization Account as December 17, 2019 was N30, 479,704,808.45.
The balance in the Natural Resources Development Fund as at December 17, 2019 was N88, 283, 218,914.40.