The Federal Ministry of Finance has approved plans to invest majority of Nigeria’s pension funds into the development of local infrastructure.
As at last month, the fund already has about NGN6,2 trillion (USD20 billion) in savings.
The National Pension Commission, PenCom was able to achieve this feat after the pension reforms was enacted under President Olusegun Obasanjo.
The approval of the plans to invest this huge funds into asset is aimed at ensuring Nigeria’s economy is simulated from the worst recession in over 20 years.
The Securities and Exchange Commission and PenCom have therefore have approved “a new instrument that will allow pension funds to invest in infrastructure bonds,” said Kemi Adeosun, Nigeria’s Finance Minister.
Adeosun sia the funds will “drive our social housing and our roads program outside the budget”.
Over the last four years, PenCom has ensured the compulsory retirement savings accounts of employees in public and private sectors are active by ensuring employers do not withhold funds.
Nigeria has a huge infrastructure deficits across various spectrum of its economy. Last weekend, the Transmission company of Nigeria, TCN reported that power generation fell below 3,000 megawatts. This was a result of the shutting down of three major power generating installations.
Nigeria will also be looking at modernising its rail and water transportation networks which is in the most sub-optimal level to say the least.
