SATISFIED at the level of performance, the Director General of National Pension Commission (PenCom), Mrs. Anohu-Amazu, has expressed PenCom profound appreciation to the House Committee on Pensions for the opportunity to make a presentation at the Public Hearing.
She respectfully urged the House Committee on Pensions to note that, “One of the achievements of the 2004 pension reform and the implementation of the Pension Reform Act in the past 11 years, is the accumulation of a pool of long-term pension fund assets, which has grown to over N5.30 trillion as at 31 December, 2015.”
“There is no gain saying or denying the fact that Nigeria’s infrastructure deficit requires urgent attention in order to achieve meaningful national development. The long term nature of pension fund assets properly aligns with the long term profile of infrastructure and real estate/housing projects. Pension fund investments in infrastructure and real estate development also provide veritable avenues for portfolio diversification for pension funds.”
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The DG noted that despite the availability of about N1.06 trillion for infrastructure financing; only N1.36 billion has been taken as at 31 December 2015, leaving N1.059trillion untapped. This is largely due to non-availability of investment instruments that qualify for pension fund investment as stipulated in the Investment Regulations.
“Pension fund investment in infrastructure projects in Nigeria is a “Win-Win” for all stakeholders, most especially for the contributors. For the pension funds, it will generate consistent streams of income and relatively higher/above-inflation returns. For the contributor, it will provide a platform for employment creation and sustenance as well as improved standard of living for the citizens.”
Anohu-Amazu stressed that “As a way forward, the Commission recommends the following action steps, which relevant Federal Government agencies should immediately embark upon,
Determination of key infrastructure segments to focus on roads, rails, power and ports. The need to identify potential projects and create PPP vehicles for these projects, put in place appropriate government guarantees that will improve ratings of infrastructure projects and thereby increase their attractiveness to institutional investors.
“Provide other Government support, such as long-term policy planning and tax incentives to encourage investors invest in less liquid, long term infrastructure investments.
“Create a public/private intermediary that provides instruments, such as takeout financing, co-financing in the form of long-term or subordinated debt, and a variety of guarantees.”