Only Two Per Cent Of Investments Is In Liquid Assets - PenCom

By Clement Alphonsus
Aisha Dahir-Umar (PenCom Boss)
Aisha Dahir-Umar (PenCom Boss)

The National Pension Commission (PenCom) has disclosed that only two per cent of the N19.67 trillion total pension assets, which amounts to N396.3 billion, is in cash as of the end of the first quarter.

This was disclosed due to a reported plan by the federal government to borrow 20 trillion from the fund-to-fund critical infrastructure. Whereas it could take months to liquidate some of the existing assets for investment realignment, much of the existing investments are, however, already tied in critical public infrastructure.

PenCom disclosed the breakdown of the assets to include government bonds (N11.46 trillion), treasury bills (N407.62 billion), agency bonds (N26.26 billion), Sukuk bonds (N127.24 billion) and green bonds, (N176.82 billion).

Last week, the Finance Minister and Coordinating Minister of the Economy, Wale Edun, had told State House correspondents that the federal government was making a move to rev up economic growth by unlocking N20 trillion from the pension funds to finance critical infrastructure projects across the country. He explained that the decision is a key part of Tinubu’s broader reforms to stabilise the economy amid high inflation and interest rates.

According to him, “One of the key drivers of economic growth is investment in infrastructure, in housing, power, rail, roads, water transport, even technology.

“These are key drivers of economic growth, they increase productivity when you invest in them, you get increased productivity, you get economic growth, and you get job creation, which reduces poverty.

“And that is the strategy, so it’s two-pronged and we’re not pivoting towards this all-important growth and you say where were the resources coming from? Nigeria is resilient, Nigerians are resilient. And the fact is that even before we start looking to foreign investors, we start looking to foreign funding, there is available in Nigeria, long-term funds to fund infrastructure projects, and it’s within the pension.”

He also stated that there is N20 trillion available that could fund growth through investment in infrastructure, including housing provision of mortgages, long long-term mortgages (25-year mortgages) at relatively low interest rates.

However, stakeholders, including the former Vice President, Atiku Abubakar, expressed disapproval on the government’s plan to use Nigerians’ pension fund to finance critical infrastructure projects.