Operators of the Contributory Pension Scheme are planning to deploy part of the pension funds in critical sectors of the economy, the National Pension Commission has revealed.
Instead of concentrating the bulk of the funds on securities, the operators specifically said they were looking towards road and rail projects.
The acting Director-General, PenCom, Aisha Dahir-Umar, said the industry was looking at a “more effective deployment of pension fund assets into hardcore and social infrastructure such as roads, rail, health care and education at purely commercial and profitable terms.
“Discussions are already ongoing with Nigeria Sovereign Investment Authority, Nigeria Mortgage Refinance Company, Financial Market Dealers Quotation, Nigerian Stock Exchange, InfraCredit and other relevant stakeholders.”
Presently, about N7.08tn or 70 per cent of the N9.9tn total pension fund has been invested in the Federal Government’s securities.
According to PenCom, the operators have invested N40.52bn in infrastructure.
The pioneering Director-General, National Pension Commission, Mr Muhammad Ahmad, said there was a need to encourage the development of enabling framework for pension funds to facilitate national development.
He said the public-private partnership rules needed to be strengthened at both the national and state levels.
He said that the integration of Africa’s infrastructure such as roads, rail, telecommunication and power among others should be promoted.
Ahamd said, “There is also a need to promote credit enhancement market in the short term. Currently, infraCredit is virtually the only private institution, backed by MDFOs, providing such guarantees (incentives) in Nigeria.
“However, enabling environment such as policies on project preparation to enable quality project issuance needs to be established so as to walk ourselves out of provision of guarantees in the future.”