It was the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, who leaked the plan at the Federal Executive Council (FEC) meeting, to draw in all major stakeholders in the long-term savings industry, whose funds may be available to drive investment. He was particular about funds that are available over a long period, of which the contributory pension funds are major.
Since it came on board in 2004 through the Pension Reform Act (PRA), repealed and reenacted in 2014, the Contributory Pension Scheme allows both employer and employee to set aside 18 per cent of an employee’s emolument as retirement savings. The savings are put under a Pension Fund Administrator for investment to earn a return. The scheme provides a source of hope for workers to retire in dignity, against the former indecent arrangement whereby retirees suffered great humiliation.
We recall the poor treatment of pensioners in the previously defined benefit scheme; we picture the column of tired and worn-out men and women, who were summoned for endless verification in dehumanising circumstances by government agencies and parastatals. Many took ill and dropped dead while in the queue to be verified. We must do everything to avoid a return to that era of anguish. That is what the new scheme was enacted to achieve. And so far, it has freed pensioners from that agonising past, though it is not perfect yet.
We take particular note of the petition by the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) to the Secretary to the Government of the Federation (SGF), wherein the workers’ unions faulted government’s proposal to borrow from the funds. In the petition, the workers’ leadership warned that the Pension Reform Act (2014), as amended, has no provision for such borrowing. We equally call on the government to follow the due process established in the Act.
Labour equally alleged that the government had already accessed nearly 70 per cent of the entire pension fund value. We remind the government that if indeed it has accessed the funds, it is unacceptable and we demand that it withdraws from tampering with the funds. This government must listen to Labour unions, the representatives of the workers, who are the major contributors to the funds and the beneficiaries.
The minister’s explanation that the government would use the pension funds to provide mass housing and mortgage loans at 12 per cent interest rates, with 25-year repayment plans, cuts no ice with the people.
The minister should be reminded that this government was voted into office for a four-year tenure and not 25 years. For a government that has not displayed fiscal prudence and responsible governance, it is dangerous to entrust it with workers’ savings beyond the foreseeable future.
Need we remind the minister that the Federal Government under former President Muhammadu Buhari frittered away N22.7 trillion Ways & Means credit from the Central Bank of Nigeria (CBN), with little or no infrastructure to show for it! Worse still, the National Assembly approved the securitisation of the loans in an arrangement that placed them on a tenor of 40 years. Buhari has since left office, but the loans remain with us and for future generations of Nigerians.
The minister’s assurance to operate within the regulatory framework of the Pension Act offers flimsy hope and does not address the concerns of workers. Nigerians have seen the government mess up regulations, like the case of electricity regulatory commission. The government has not abided by the terms of the NERC Act, and that has left the sector in disarray 10 years after its enactment.
In August 2023, at the inaugural FEC meeting of this administration, the minister of Finance, Edun, told Nigerians that the Tinubu government had no intention to borrow from any local or foreign organisation. He said the benefits of petrol subsidy removal would be ploughed back into various sectors to boost government revenue.
In November 2023, he gave similar assurances to the Joint Senate Committee on the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy. The country saved N1.4 trillion between June and September 2023 from the subsidy removal. The government said subsidy removal was going to reduce the country’s appetite for debt and cut down on over-reliance on borrowing.
On that, Tinubu said: “We shall re-channel the funds into better investment in public infrastructure, education, healthcare and jobs that will materially improve the lives of millions.” Though Nigerians have yet to see that promise, we urge the government to stay focused on what it promised and leave workers’ savings alone.
In a country where the government does not prioritise workers’ welfare and life in retirement, it is dangerous and unacceptable for a profligate government to encroach on workers’ assets. Just stay away from the pension funds.
