Infrastructure: Why N1.16trn Pension Fund Still Untouched – PenCom Boss | Independent Newspapers Limited
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Infrastructure: Why N1.16trn Pension Fund Still Untouched – PenCom Boss

Chinelo Anohu-Amazu
Posted: May 3, 2016 at 7:36 pm   /   by   /   comments (0)

Ahmed Musa

Abuja – Chinelo Anohu-Amazu, Director General of National Pension Commission (PenCom), Tuesday lamented that out of the N1.16 trillion available for post service infrastructure financing, only N1.36 billion had been accessed so far.

The Commission which is responsible for the management of contributory Pension funds from both public and private sectors of the nation’s economy disclosed through its DG that the problem responsible for this development was largely due to lack of structured investment instruments for Pension funds to participate in the provision of finance for infrastructure development in the country.?

Speaking on Tuesday at a public hearing on the “need to invest Pension funds to meet Nigeria’s infrastructure challenges”, organised by the House of Representatives joint Committee on Pensions, Finance and Capital Market and Institutions, she said there was no significant investment in infrastructure bonds and infrastructure funds despite the expansion of the permissible investment horizon in 2010, to Include such asset classes.

Analysing the asset injection model for infrastructure investment, the breakdown of the total Pension assets invested showed that the N517.76 billion or 9.76 percent was for domestic ordinary shares; N68.35 billion or 1.29 percent for foreign ordinary shares; N3.515 trillion or 66.29 percent for Federal Government Securities; N152.44 billion or 2.87 percent for State Government Securities; N183.01 billion or 3.45 percent for corporate debt Securities while N12.82 billion or 0.24 percent was for supra-national bonds.

Others include: N561.07 billion or 10.58 percent for local money market securities; N20.72 billion or 0.39 percent for open/close-end funds; N230.34 billion or 4.34 percent for real estate properties; N24.55 billion or 0.46 percent for private equities; N1.36 billion or 0.03 percent for Infrastructure funds; N36.04 billion or 0.68 percent for cash and other assets while N20.87 billion or 0.39 percent for other liabilities.

She said,  “there was no significant investment in infrastructure bonds and infrastructure funds despite the expansion of the permissible investment horizon in 2010, to include such asset classes. This was largely due to lack of structured investment instruments for Pension funds to participate in the provision of finance for infrastructure development in the country, saying:

“It is therefore imperative to note that no Pension fund asset is uninvested or ‘lying idle’ in any account as is being speculated in some quarters,” adding that the Commission is performing it’s statutory role of monitoring the investment activities of the PFAs on daily basis”.

Represented by Ebenezer Foby, PenCom Commissioner, the DG however noted, “Pension assets are being invested by the licensed PFAs/CPFA as pool of funds under the custody of licensed Pension fund custodians (PFCs).”

She explained that the legal framework for the investment made it possible for the value of Pension fund to grow from N265 billion as at 31st January 2006 to N5.30 trillion as at 31st December 2015.

She also stressed the need to refocus on development of bankable/eligible infrastructure financing structure in Nigeria that can attract Pension funds investment.

 

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