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Federal Govt To Utilize N20Trillion From Pension Funds For Infrastructure Development | Citizen NewsNG

ByCitizen NewsNG

May 15, 2024

President Tinubu 

 

 

 

The Federal Government of Nigeria has announced plans to utilize N20 trillion from the country’s pension funds to finance infrastructural projects across the federation.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed this to State House correspondents following the Federal Executive Council meeting held on May 13 and 14 at the Presidential Villa, presided over by President Bola Tinubu.

According to Edun, the government aims to invest pension and life insurance funds, along with other domestic resources, in various sectors such as housing, power, rail, roads, water transport, and technology.

He added that this initiative is intended to boost Nigeria’s economic growth, create jobs, and reduce poverty.

Edun emphasized that before seeking foreign investments, the government will look to leverage domestic long-term funds to finance these infrastructure projects.

Mr Edun said, “These are key drivers of economic growth. They increase productivity. When you invest in them, you get increased productivity, economic growth, and job creation, which reduces poverty.

“And that is the strategy, so it’s two-pronged, and we’re not pivoting towards this all-important growth, and you say, where the resources come from? Nigeria is resilient. Nigerians are resilient.

“Even before we start looking to foreign investors, we start looking to foreign funding available in Nigeria, long-term funds to fund infrastructure projects, and it’s within the pension.”

He noted that the pension, life insurance, and investment fund industries offer about N20 trillion in available funds, much of which is currently in short-term investments.

He said, “generally, there are offers of N20 trillion available, or much of it is in short-term funding that doesn’t need to be quite sure money is long-term,” noting that “people save over their lifetime for their pension.

“In conversation, in consultation, collaboration, and cooperation with the private sector, we are now able to announce, with the full knowledge and support of all parties, that there will be an initiative to fund growth through investment in infrastructure, including housing provision of mortgages, long-term mortgages, and 25-year mortgages at relatively low interest rates,” he revealed.

He added, “Initially, of course, the government will stand by and provide some support, particularly in this era of high interest rates, but eventually, as interest rates come down, there should be less room for the government through providing, for example, guarantees and so forth.”

Edun outlined that house construction will be funded on the supply side, while mortgages will be provided on the demand side.

This plan he said, aims to leverage the expertise and capacity of the private sector in partnership with the government to drive economic growth and development in Nigeria.

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