from Edet Udoh, Lagos
The Federal Government has been called upon to tackle every drawback that will hinder effective management and smooth implementation of the Contributory Pension Scheme (CPS) in Nigeria.
Executive Director, Centre for Pension Right Advocacy, a legal practitioner, Ivor Takor, made this called in his paper ‘The impact of Nigeria contributory pension scheme on the nation’s economic Growth’, presented recently in Abuja.
Ivor who enumerated the gains to include the investment of pension fund in federal and states governments’ securities which he said has assisted these governments greatly.
He said the fund has provided private business operators alternative option to source for their capital for financing their businesses instead of sole relying on banks, adding that the fund has contributed significantly to the growth of the nation’s gross domestic product (GDP).
“Investment of pension fund in federal and states governments’ securities has assisted these governments to cost-effectively manage their national debts, thereby contributing in the solving of their financial needs.
“The fund has come in as an independent financial intermediary, as the nation’s private business enterprises no longer rely on the banks as the sole sources of outside capital for the financing of their businesses.
“The fund has therefore provided a domestic source of borrowing, which doesn’t attract excessive high interest rate. The transfer of resources in favour of long term assets by the fund has significantly impacted on the nation’s GDP growth rate,” he said.
Ivor condemned the bills sponsored by some group of legislatures from both chambers of the national assembly aimed at exempting workers of some federal government agencies and paratatals including the Police, Customs, Immigration, Prisons and the Nigeria Security and Civil Defence from CPS.
He said if the bills which have all gone through second readings in both Chambers, and public hearing held on them, eventually sail through, then it will rubbish to gains already made in this sector even as he said that it will impact negatively on the general economy of the country.
Ivor stated that as at December 2017, the Net Assets Value of Pension Assets under the Contributory Pension Scheme was N7.5 trillion.
He said of the N7.5 trillion Net Assets Value, 70.42% was invested in FGN Securities, 10.33% in Ordinary shares, 9.08% in local money market securities, 2.03% in States government’s securities, 2.71% in Real Estate properties. The fund was also invested in Supra National Bonds, Mutual Funds, Specialised Funds (Infrastructure and Private Equity) etc.