N54bn pension arrears will drive activities in agriculture, health sector – Expert

A financial analyst, Atiku Samuel, says the N54 billion pension arrears released by the Federal Government will enhance activities in agriculture and health sectors.

Samuel, Lead Researcher at BudgIT, a Lagos based civic organisation, made the observation in an interview with the News Agency of Nigeria (NAN) in Lagos on Wednesday.

NAN recalls that the Federal Government on April 5, released N54 billion to clear the backlog of pension for 2014, 2015 and 2016.

The expert said that a large chunk of the money would be expended on food and healthcare, adding that less percentage of the money would be spent on housing, education of dependents and utility bills.

“A large percentage of retirees live in rural areas and their spending centres around food, healthcare and transportation. Some might even want luxury food or items to mitigate years of denial.

“Most of the people that retired now had access to mortgage in the 80s both at the Federal level and some of the Jakande buildings.

“From our survey, about 50 per cent of them have apartments.

“The remaining 50 per cent from our survey are at different levels in construction of their building which would have little impact on the construction sector.

“Because most are doing finishing works, roofing and plastering just to move into their building,” he said.

According to him, the economy will also benefit from new investments of retirees in retailing and transport businesses.

“Most retirees will want to invest in small scale businesses, buying buses and taxis which they can hand over to people to use on their behalf since they do not have much strength to do strenuous work,” he said.

Samuel commended the government for the payment of the arrears, stressing that its value transcends social impact.

“Every N1 injected into the economy has five times multiplying effect because it works through the economy and creates value.

“With the N54 billion injected by the government, times five of that value would be realizable which is above N250 billion.

“If you look close at the economy of some African countries, I do not think their economy is that big,” he said.

The expert said that the money would translate to job creation, increase liquidity and purchasing power of the masses.