By Chris Agabi
The National Pension Commission (PenCom) has disclosed that despite the availability of about N1.06 trillion for infrastructure financing, only N1.36 billion has been taken as at December 31, 2015, leaving N1.059trillion untapped.
This was disclosed in a memorandum submitted by the National Pension Commission to the House of Representatives Committee on Pensions at the public hearing on the need to invest pension funds to meet Nigeria’s infrastructural challenges.
PenCom attributed the development to non-availability of investment instruments that qualified for pension investment as stipulated in the Investment Regulations issued by the Commission.
PenCom said that as at today, all pension funds’ assets were invested in various approved assets classes within the limits allowed by the Investment Regulations.
Thus, it said, over 66 percent of the pension assets were invested in federal government securities. On the other hand, investment in equities and money market securities were moderate at 11.05 percent and 10.58 percent, respectively, adding that no pension assets under the Contributory Pension Scheme was un-invested or ‘lying idle’ in any bank account in Nigeria.
PenCom said that pension fund investment in infrastructure projects in Nigeria was a “Win-Win” for all stakeholders, especially for the contributors.
The PenCom said: “For the pension funds, it will generate consistent streams of income and relatively higher/above-inflation returns. For the contributor, it will provide a platform for employment creation and sustenance as well as improved standard of living for the citizens.”
It added: “In the light of the statutory and regulatory framework for investment of pension fund assets, there is an urgent need to refocus the discussion to a call for development of bankable/eligible infrastructure financing structure in Nigeria that can attract pension fund and other institutional investments. Thus, in order to attract pension funds investment, infrastructure projects in Nigeria must be shown to be commercially viable and self-financing. The bid/concession processes for the projects must also be open and transparent. There must also be a cover against political risk, to be provided by the Federal Government and/or Multilateral Finance Institutions e.g. IFC/World Bank, AfDB, etc.”