The National Economic Council (NEC), Thursday said it has concluded arrangement to take N2 trillion from the Pensions Fund under the National Pension Commission (PENCIM) to finance critical infrastructure like roads, power and rail projects.
This, according to the council, would take effect in the first quarter of next year.
Governor of Kebbi State, Atiku Bagudu alongside the Lagos State Governor Babajide Sanwolu and the minister of Finance, Budget and National Planning Zainab Ahmed said this while briefing State House correspondents at the end the 100th NEC meeting presided over by Vice President Yemi Osinbajo at the Presidential Villa, Abuja.
The governor said that the proposed plan to take N2 trillion from the Pension Funds was to address the infrastructure deficit.
According to Bagudu, this was contained in the interim report by the sub-committee set up at the 99th NEC meeting which has the 36 State Governors and ministers with economic portfolios and the Governor of Central Bank of Nigeria, CBN.
He said, “You will recall that at the 99th NEC meeting, the NEC set up a sub committee to see how Pension funds can be used for infrastructure development as provided for by the Pensions Reform Act because up to 20 percent of the pensions funds under the current law can be used for infrastructure.
“Last NEC meeting, there was a review of the performance of the Nigerian Sovereign Investment Authority and we are all impressed about experience they had gained in the last few years and their performance. And it was decided that a committee be set up on how we can leverage on that performance to create a platform where pension funds can be used for infrastructure development in a safe manner, so that there will earn long term returns for the pension funds while also helping to build Nigeria’s infrastructure.
“So today (Thursday), the sub-committee presented an interim report where they advised on some of the issues that came up while deliberating. Of particular note was that other countries have been using the same mechanism – South Africa, Saudi Arabia and others have been using their pension funds and sovereign wealth authorities investment process to create platform for development.
“So, the committee reported and identified potential road infrastructure, infrastructure in the power, rail sectors that can be funded through this mechanism.
“They noted that this year’s budget for example has N169 billion for roads across the federation and it is grossly inadequate. But with this mechanism maybe up to N2 trillion can be accessed and leverage upon.
“The NEC commended the committee for the interim report and the subcommittee promised that early next year there will be final report for the NEC to consider.
“Secondly, the NEC also received the interim report of the sub-committee to consider the ownership structure of Electricity Power Distribution Company as far as state ownership is concern.
“You will recall also that at the 99th NEC meeting, NEC discussed that since the privatization of Electricity Power Distribution Company that at least 40 percent that was meant to be for the states government and federal government have not been so distributed.
“Therefore, a committee was set up to review the status/ownership of those shares that have not been distributed and report back to NEC. The committee is charied by the governor of Kaduna State, Nasir El-Rufai with six other governors, some ministers including the minister of finance and some agencies.
“They presented an interim report that they are meeting soon to review the various information provided by the various agencies then they will brief the counsel further.”
The Governor also said that there was a presentation by the Niger Delta Power Holding Company, titled “evaluation options going forward”.
According to him,” You may recall that 10 years ago, the Niger Delta Power Holding Company was created and it’s owned by federal, states and local governments. They had 10 completed generating plants and two others that are in the process of being completed with about 4,500 megawatts.
“The board of the Niger Delta Power Holding Company and shareholders who are the governors and local governments chairmen, reviewed the options going forward because in the design of this company, the assets were supposed to be privatized.
“Today, the options were discussed and members of the NEC advised to study the presentation so that at more opportuned time, NEC can review the presentation and take whatever necessary steps henceforth.”
Earlier speaking, Governor Sanwo-Olu said that the State governors emphazed that community policing was important and could be used to create employment.
He said, “Part of the consideration today was on NEC committee for security and policing. This was a committee that was headed by the governor of Ekiti state and it has other governors, the Inspector General of Police, the National Security Adviser, Chief of Defence Staff and other senior security operatives.
“At the end of the Committee deliberations and presentation, the council was informed that the security situation in the country has tremendously improved and we have seen improved zonal collaboration meetings with the various zones in the country.
“We have also seen a significant reduction in the proliferation of small arms as a result primarily of the border closure. There is also a need for the state government to escalate and to manage situations before any breakdown snowballed into ethnic and religious crisis.
“It was also mentioned that because of the huge resources required, it was advised that state also put together to set up security trust fund so that we don’t have everybody trying to do the same thing everywhere.
” It was also further emphasized that community policing is important which we see as other arm that would help us reduce incidents of youth unemployment because we believe that the programme too could be used to align with the employment of our youths.”
Also, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed said that her ministry reported to the Council on the balances of some key accounts.
”For the Excess Crude Account, as at 19th November, 2019, we have a balance of $324,967,933.72. In the Stabilisation Account, as at 17th of December, 2019, we have a balance of N30, 479, 704,808. In the Natural Resource Fund, still at the same date, 17th of December, 2019, we have the balance of N88,283,218,114.40.
“Also, today we have an update to the Council on the repayment process for the Budget Support Facilities that was granted to the states, the current situation is that deductions are ongoing and remittances on these facilities are being made to the Central Bank, ” she explained.
