States mull N17trn loan from pension fund, SERAP alleges

*Gives 14 days ultimatum to FG to halt process or face lawsuit

*Unbridled borrowing not substitute for lack of accountability, it says

By Williams Orji

The Socio-Economic Rights and Accountability Project (SERAP) has urged President Muhammadu Buhari to instruct the National Pension Commission (NPC) to block state governors from borrowing N17 trillion from pension funds.

The governors had claimed that the money would be used for infrastructural development.

The governors made the proposal after a briefing from the Kaduna State Governor, Nasir el-Rufai, Chairman of the National Economic Council (NEC) Ad-Hoc Committee on Leveraging Portion of Accumulated Pension Funds for Investment in the Nigeria Sovereign Investment Authority (NSIA).

In a letter dated December 5, 2020, signed by SERAP’s Deputy Director, Kolawole Oluwadare, warned Buhari that approval of the governors’ request would be detrimental to the fund beneficiaries, given the level of corruption in Nigeria, and transparency deficit especially at the state level.

The organization said approving such loan is contrary to the 1999 constitution (as amended), the Pension Reforms Act, and the international anti-corruption and human rights obligations, to which Nigeria is signatory, for federal and or state governments to use pension funds as escape route from years of financial mismanagement.

The letter was copied the Attorney General of the Federation and Minister of Justice (AGF), Alhaji Abubakar Malami (SAN).

SERAP noted that “it would be very difficult to hold governors to account for the spending of pension funds, as states have persistently failed to account for the spending of public funds, including security votes”.

It stated: “Pension funds should not be used to make up for the failure of governments to cut the cost of governance, persistent refusal to reduce corruption, failure to obey court orders to recover life pensions collected by former governors and their deputies, and public funds collected by corrupt electricity contractors who disappeared with the money.

“Many state governors have repeatedly failed to pay workers’ salaries and pensions, several states are failing to pay contributory pension.

“Allowing state governors to collect a windfall of pension funds at the expense of pensioners who continue to be denied the fruit of their labour would amount to double jeopardy”.

SERAP gave the Buhari administration 14 days to indicate the measures being taken to instruct the NPC to stop the governors from putting life to the move.

The rights group threatened legal action if their demand is not met at the end of the ultimatum.

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