Over N3tr pension fund untapped for economy bailout, says DG
Before the nation’s economy potential can be unlocked in the insurance sector and others, there is a need to tap into over N3 trillion pension fund, National Pension Commission (PenCom) through its Director-General, Mrs Chinelo Anohu-Amazu, has said.
The Director General, who spoke at the 17th yearly lecture of the Catholic Brothers United (CBU) in Lagos, in a presentation titled: Pension Fund as a Catalyst for Economic Development, regretted that despite the availability of about N861 billion (15 per cent) of the total N5.74 trillion total pension fund assets for infrastructure bonds, the fund has remained untapped due to the non-availability of investible instruments in the market.
She said there was only 0.03 per cent investment in infrastructure funds leaving a huge untapped financing prospect, adding that like other emerging economies, Nigeria has invested over 69 per cent of the pension fund in government securities.
She said investment in equities and money market securities were moderate at 11.54 per cent and 8.66 per cent respectively as at the second quarter of this year, she added.Stressing the need for urgent diversification of the economy away from oil in view of current volatility in the global energy market, the PenCom chief lamented that non utilisation of the fund places the country at a competitive disadvantage internationally, particularly with paucity of long term financing, which is a critical factor.
She stated that in order to support economic development, it is fundamental that the pension fund is diversified to include investment in identifiable infrastructure, real estate and other key aspects of the real economy.
The PenCom chief urged both the corporate and pension industry strategies to design initiatives and activities that would increase investment in infrastructure and other alternative assets from the four per cent in 2014 to 40 per cent by the end of 2019.
“Similarly, with the recent clamour for private sector participation in infrastructural development to inspire the real sector, it is clear that private finance is essentially needed to supplement government’s finite financial resources,”She said.
“The untapped opportunities and the creative efforts of the pension industry has formed a niche for engaging the relevant stakeholders both from the public and private sectors, particularly the Ministry of Works, Power and Housing to build a synergy towards developing the Nigerian infrastructure as a veritable step towards economic diversification.”
On the pension industry outlook, she said the Commission, in collaboration with its industry stakeholders has sought to further advance its notable achievements and drive the deployment of the pension assets for economic development.