ON BORROWING FROM PENSION FUND – A STEP IN THE WRONG DIRECTION THAT WOULD ONLY FURTHER COMPLICATE THE LIVES OF NIGERIAN PENSIONERS

By Zik Gbemre

With the established fact that the idea behind the nation’s pension fund scheme is to guarantee a meaningful and modest life after employment, we consider appalling and unacceptable for the Federal Government, for whatever reason, to dip its hands into the funds without taking into cognizance, regulations guiding the investment of the pension fund in the first place, and also having robust consultations with stakeholders. These are funds arising from the sweats of Nigerians workers, so it is simply out of place, and heartless for the Government to even think of, or consider touching the funds, for whatever it intends to do with it. There is no justification whatsoever that should make the Government to touch the funds meant for pensioners. Past and present Nigerian Governments at all levels, have never been faithful in promptly paying pensioners all that is due them, and when they are supposed to. Now, they want to add to their hardship by borrowing funds from pension scheme.

These were my thought, and that of many others concerned, when it was recently said that the African Development Bank (AfDB) openly endorsed the idea of African countries spending part of their pension funds on infrastructure development. President of the AfDB, Dr. Akinwunmi Adesina, while speaking with State House correspondents after meeting behind closed doors with President Muhammadu Buhari, at the presidential villa, said with the continent’s $1.8t pension and sovereign wealth assets, it has no business going abroad to borrow to fund some projects. The AfDB chief, who noted that the country could tackle her infrastructure deficit by committing the pension funds that are idle on infrastructure, added that the continent had an infrastructure gap of $68b to $108b, which could be adequately addressed by utilizing the $1.8t accrued pension and sovereign wealth funds.

What is more disturbing is the fact that the Vice President, Yemi Osinbajo, while speaking at the National Economic Council (NEC) meeting, which he presided over recently disclosed that the government had concluded plans to borrow N2t for infrastructure development. Hardly had the disclosure been made by the government than workers’ unions, stakeholders, and interested parties began to urge the Federal Government to look elsewhere. Specifically, the stakeholders, including experts on pension matters are of the view that the move, which they described as unnecessary and an attempt to frustrate the future of contributors if not halted, can threaten the scheme, as well as erode contributors’ confidence.

According to a report, “obviously, not many Nigerian workers are aware that already, as much as N7t, of the more than N10t workers’ contributions have been invested in the several Federal Government security instruments, which the government deploys to borrow money at a minimal cost from the public. The report further reveal that the N7t pension investments by Pension Fund Administrators (PFAs) represent about 41.1 per cent of the gross domestic debt stock of the country, which at end of September 2019 stood at N17t. This revelation is contained in the December 2019 Summary of Pension Fund Assets.

“The passage of the comprehensive National Pension Act in 2004, and its subsequent review, were lauded by many, as a watershed in the nation’s pension reform and administration. One of the critical objectives of that act was to unify pension administration by bringing together, the various private sector pension schemes and those in the public sector so that a steady pool of resources would be made available at all times to address the retirement benefits of workers, releasing in the process, its resources for greater efficiency and to catalyse the financial sector. It also had the intention of securing the funds for a more guaranteed future for the Nigerian workers on retirement, whatsoever the sector. Globally, pension funds are treated with the utmost care, and steps are taken by all stakeholders, especially the states, if they are genuinely committed to the people, to ensure the continuous integrity and protection of the fund. It is therefore shielded from the vagaries of the market place and the political arena, and its deployment is rather towards activities that would not compromise its value, both qualitatively and quantitatively. This is as a result of the fact that anything that compromises its value, puts into jeopardy, the lives of many that retire daily from active work life, and have placed enormous hope on the proceeds collectible from the fund, which they have toiled day and night to contribute to.

“The capacity of the fund to deliver on workers expectations at all times and in all situations must, therefore, be assured and held sacrosanct by all, especially policy makers. It is on this premise that organized labour views with the utmost anxiety, the proposal by the Federal Government to borrow N2t from the pension fund to fund infrastructure development. For instance, the Nigeria Employers’ Consultative Association (NECA) specifically maintained that it considered the proposal as fearful and a huge threat to the future of Nigerian workers. While expressing grave concern at the fate of the workers, in the face of incessant borrowing by the government at all levels without corresponding development, NECA noted that it was unthinkable for the government to borrow from the pension fund when the citizens have not felt the impact of the mounting debt of government at all levels. The Director-General of NECA, Timothy Olawale, who condemned the move noted that the scheme is known as a contributory pension scheme, and appropriately involves contributions from employers and their employees, and without contributions from the government.”

It saddens my heart and mind, that over the years, all that we see and get from our political leaders, is their habit of always looking for the easy way out in addressing the overwhelming needs in the country, without a corresponding disposition of being responsible, accountable and making the necessary sacrifice to get things done. They borrow at will, regardless of the future consequences and implications, and on top of it squander the funds in the name of doing government work, without the citizenry feeling any positive impact. The Government at all levels have not been faithful in the payment of pensioners across the country. So, wouldn’t the situation be made worse with their continues plans to dip their hands and borrow more from pensions funds? What guarantees do we have, that the Government would return/repay what was borrowed? What happens when this Government is no more? Would the next Government agree to repay back what was borrowed from the pension fund by its predecessor? These are the issues that make the said move unacceptable.

Agreed that the Government needs to invest massively on infrastructure across the country, but it should not be to the detriment of pensioners funds meant for the retirement. There are many areas the Government should focus on in addressing infrastructural development funding. The number one area the Government should focus on and make necessary adjustments, so as to create avenue for more funds availability to invest in infrastructure, is the unaccountable gross expenditure in government funding. Especially at the National Assembly level, the areas of duplicated government agencies, and so on. This is not the first time we have reiterated the fact that the cost of governance and the amount of funds daily expended as recurrent expenditure in maintaining the Executive and Legislative arms of Government in Nigeria, is totally unacceptable. In fact, it is the most expensive in any part of the world, and has become the channel through which public funds that would have been invested in providing needed infrastructure, are wasted. This is the bane of Nigeria’s development. The situation is getting worse by the day that many have resorted to praying that the cost of running Nigeria’s-kind-of democracy does not kill the country.

Despite all the privileges that they enjoy, one would have expected these Nigerian Politicians to be satisfied and contented. But not so, as they are known to steal/misappropriate/mismanage public funds meant for the development of their various States and people. While most of them have been able to hide their atrocities against their various States and the nation from the eyes of the law, others have not been that lucky. As at today, there are six former Governors that have been jailed in Nigeria for corrupt practices committed against the Nigerian masses. It is very disheartening to note the way these public office holders steal/misappropriate public funds, and at the same time still use and waste our collective wealth in the name of doing ‘government work’; while the people they are supposed to serve are left to wallow in abject poverty. It is only in this country you will find most public officials living beyond their legitimate means of livelihood. The way they waste money, lavish in affluence and comfort, suggest to me that we still have a long way to go in salvaging the nation from its current hardship.

This alone, tells us that there is so much loopholes of ‘public-funds-wastages’ in the Nigerian system, which the Federal Government should focus on addressing and making the required adjustments where necessary. So as to appropriate those funds for infrastructural development, and not put their hands on pension funds. This important because in the midst of their government spending wastes, Nigerian pensioners are made to go through hell and hardship, just to get their pensions. For instance, it is sheer wickedness and heartlessness, that after 35 years of daily risking their lives to protect citizens of their country, retired Officers of the Nigerian Police Force (NPF), would be treated so badly by the Government and relevant Authorities in the payment of their entitled pensions and gratuities. How can Police Officers in the country, sacrificially put in 35 years of their lives and sweats, yet their gratuities are deliberately delayed, underpaid, or not paid at all until they eventually get sent to an early grave?

These are the issues that the Nigerian Government at all levels have not been able to prove themselves responsible enough to handle and be accountable, yet they have the effrontery to be dipping their hands in pension funds. That is totally unacceptable. It is painful to hear that there are available funds to pay pensioners and yet, they are not paid. The situation is worse at the State level. For example, Delta State pensioners suffer untold hardship after retirement. The Teachers are especially the worst victims of this maltreatment. Unless you have ‘long legs/connections’, or you are able to bribe those concerned so as to have your file processed as expected, you would suffer till God knows when before your pension is attended to. As a result of this, many have died after retirement, while waiting for the pensions to be paid by the State Government.

With the availability of pension funds, why then is the Government at all levels still not able to pay pensioners as soon as they retire? Nigerian pensioners ought to be paid their gratuities at least a week after their retirement. The details of every Nigerian worker is known, so all their entitlements and gratuities should be prepared before the retirement date of any Nigerian worker, which he/she would receive not later than Seven working days upon retirement. It is sheer wickedness for a retiree to be made to fill all kinds of forms, or made to pass through several stress, just to receive dividends of their Services To The Nation. The records of every Staff are there, since the Government use same to pay their salaries. And the Government ought to know when every worker would be retiring. There is really no justification for the delay of pensioners payment in this country. Sadly, the Government players now want to be borrowing more funds meant for pensioners, which we all know they will eventually use to fund contracts that will never be completed in their tenure in office.

Zik Gbemre.

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