Inadequate instruments leave N1.059trn pension fund untapped – PenCom


DG PenCom, Mrs Chinelo Anohu-Amazu

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Chuks Udo Okonta

The National Pension Commission (PenCom) said out of N1.06 trillion available for infrastructure financing, only N1.36 billion has been taken as at 31 December 2015, leaving N1.059 trillion untapped.

PenCom stated this in a presentation made at the National Assembly, stressing that the government and private sector operators were unable to access the funds due to non-availability of investment instruments that qualify for pension fund investment as stipulated in the Investment Regulations.

It noted that for government to access the pension funds for infrastructural development, there should be determination of key infrastructure segments to focus on – roads, rails, power and ports, and need to identify potential projects and create Private Public Partnership (PPP) vehicles for these projects.

It also urged the government to put in place appropriate government guarantees that will improve ratings of infrastructure projects and thereby increase their attractiveness to institutional investors.

“Provide other Government support, such as long-term policy planning and tax incentives to encourage investors invest in less liquid, long term infrastructure investments.​

“Create a public/private intermediary that provides instruments, such as takeout financing, co-financing in the form of long-term or subordinated debt, and a variety of guarantees.

“The intermediary would need to have a credible governance and management structure in place that provides oversight as well as checks and balances to maximally insulate its operations and decision-making from political influence.

“The intermediary should provide the credit assessment and arranger functions,” it said

PenCom canvassed improved coordination between key stakeholders such as the Central Bank of Nigeria, the Ministry of Finance, the Infrastructure Concession Regulatory Commission, Securities and Exchange Commission, and various line Ministries, Departments and Agencies to ensure that the right projects are initiated, financed and successfully completed.

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