PENCOM: Obasanjo blames governors for economic recession

• Cautions Buhari over N6tr pension funds
• President urges PenCom to raise assets
• Senate rejects planned sale of assets

Former President Olusegun Obasanjo yesterday blamed the economic recession on what he described as a wasteful use of resources by state governors.

Obasanjo accused the governors of tendencies to spend whatever revenue they have without saving for the future.

He cautioned President Muhammadu Buhari against investing Nigerian workers’ pension fund which is building up to almost N6 trillion in risky and unsecured portfolios no matter the pressure or promise of high returns from such investments, so as to guarantee the security of the workers at old age when they retire.

Obasanjo spoke when he presented a keynote address at this year’s World Pension Summit ‘Africa Special’ co-hosted by the Netherland – based World Pension Summit Organisation and the National Pension Commission (PenCom) in Abuja.

As the former president accused the governors of spendthrift, The Guardian yesterday learnt that the pension payments for retirees under the contributory scheme which came into full operation in 2005 have already suffered a shortfall of N100 billion provision for the 2016 budgetary plan. This means PenCom has to borrow to meet up its obligation to the retirees, otherwise some of them would not be paid.

On the governors, Obasanjo said: “ I remember when I was the president, I initiated the idea of saving the Excess Crude Account (ECA) for the raining days, but the governors resisted it and told me there was no need saving because it was already raining. If it was raining then, what do we have now?”

He pointed out that the failure to save is what has pushed the Nigerian economy to where it has found itself today.

On the pressure being mounted on Buhari to deploy the pension contributions to long-term investment to yield returns as well as provide services, Obasanjo maintained that pension funds must only be invested in sustainable investment platforms like housing or road infrastructure as is the case in Singapore where he said every male Singaporean owns a house with the assistance of finance from pensions.

“ I am happy to know that what we put in place over 10 years ago has become so successful with seven million workers already covered and with almost N6 trillion assets. What we should now be discussing is how we can capture more workers and not necessarily what to do with the assets already in stock.

“Pension management innovations should be guided by sustainability. We cannot be too adventurous with the contribution of workers’ funds because when people work all their lives and save for their future, they should not be told stories when they retire at old age and they want their money.”

In his message to the summit, President Buhari described pension assets as a veritable tool for nation building and accordingly directed the National Pension Commission (PenCom) to upscale its activities to increase the Nigerian pension assets from the current level of N5.8 trillion

Represented by the Head of Service of the Federal Civil Service, Mrs. Winifred Oyo Eta, the president described the event as timely and charged it to come up with useful ideas on how to innovatively manage pension assets.

“It is globally acknowledged that pension matters occupy a strategic place not only as a vital component of social security but as a vehicle for nation building. Accordingly, Africa has given considerable attention in the recent past to pensions and related issues largely due to the myriad of challenges encountered in the administration of pensions as well as the economic downturn in many countries on the continent.”

Meanwhile, the Senate has rejected the controversial plan to sell the country’s critical national assets.

At the commencement of the debate last week, many senators had spoken against the planned sale despite the fact that the Senate President, Bukola Saraki made a personal submission in support of the move.

At yesterday’s session, the Senate reviewed the recommendation of the ad-hoc committee it had set up to harmonise submissions on the matter and ended up with 22 recommendations, including the total rejection of the sale of critical national assets.

The upper chamber also called on President Muhammadu Buhari to, as a matter of urgency, prepare an Economic Stimulus Bill containing all the fiscal stimulus packages, investments, and incentives designed to pull the country out of recession, to the National Assembly for accelerated consideration and passage.

The lawmakers asked the Executive Secretary of Financial Reporting Council of Nigeria (FRCN) to brief it on the way out of the recession.

Chairman of the committee, Senator Yahaya Abdullahi (Kebbi North) had while presenting the report of the committee to the Senate explained why the critical assets must not be sold.

He said: “The matter should be approached from a commitment to protecting the common patrimony of Nigerians by preventing the assets from falling into the hands of sharks, assets strippers and cannibalizers, while also guarding against the fuelling of further inequities in the society and polity”