FG’s Plan to Borrow N620 Billion From Pension Funds Gets Backlash From Retirees, Workers

FG’s Plan to Borrow N620 Billion From Pension Funds Gets Backlash From Retirees, Workers

  • Nigerian workers and retirees have kicked against the proposed plan by the federal government to borrow from the pension funds
  • The workers said the plan may backfire as the government may not be able to reimburse the PFAs from where the funds will be borrowed
  • The government plans to use the funds to finance the transportation infrastructure which is contained in the National Development Plan document

Nigerian government’s insatiable appetite for borrowing got a knock recently as plans to dip hands into pensions funds is flatly rejected by retirees and workers.

According to Nairametrics report, the government has unwrapped plans to borrow N620 billion from pensions funds to support its infrastructural development drive across the country.

Rotimi Amaechi, Transport Minister in Nigeria
Rotimi Amaechi, Transport Minister in Nigeria Credit: Ankush Josh
Source: Getty Images

What the government wants to do with the fund

The funds will go into the proposed 7.73 trillion investment in transportation infrastructure in the next five years.

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The Nigerian government is specifically seeking to get the facility to finance the transportation sector between 2021 and 2025. It hopes that the over N13 trillion pension fund will grow at an average rate of 15 per cent annually.

The National Development plan 2021-2025, Volume I, launched recently contains the information.

The Punch reports that the Nigerian government also said in the NDP paper that the N7.73 trillion infrastructure expenditure would be gotten from the capital market, the Presidential Infrastructure Development Fund portfolio and the pension funds.

Pensioners kick

According to the government, the N620 billion facility would be hinged on the willingness of pension funds administrators to invest in the transportation sector.

Ogunkolade from the NUP noted the group called for caution on the borrowing plan.

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He said the money does not belong to the government but to the workers who will retire soon.

List of states owing pension

Legit.ng reported that it is a known fact that some states of the federation not only owe a backlog of gratuities to their retirees but are unable to pay the salaries of their workforce as and when due.

So many reasons ranging from a dearth of federal allocation and inability to generate the needed Internally Generated Revenue (IGR) have been given by some state governors for their failure to pay salaries of the workers.

The Punch reports that some state governments are currently owing pensioners many of whom are dying without receiving their entitlements.

Source: Legit.ng

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