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Editorial

No To Pension Fund Borrowing

Published

6 years ago

on

Being a country most notorious for borrowings, it does not come across as a consternation that Nigeria would ask to take a N2 trillion loan from the dedicated Pension Fund. Expectedly, the proposal has raised the ire of labour unions, workers, groups and critical stakeholders who have vehemently repudiated the idea. Despite that, the federal government seems intent on going ahead with the planned action.
The Vice President, Prof Yemi Osinbajo, confirmed the government’s position at the National Economic Council (NEC) meeting he presided lately where he revealed that plans had been perfected to take N2 trillion from the current N10 trillion domiciled in the pension till to finance the rejuvenation of decomposing infrastructure.
However, if the glitches that characterised the pension schemes prior to 2004 are anything to go by, then, this is a fatal move that must be halted. Our suspicion is deepened by the fact that at the moment, the government’s indebtedness to pensions in accrued rights, pension differentials, minimum pension guarantee, pension increase is well over N400 billion.
Government needs to be reminded that the Contributory Pension Scheme came into existence in 2004 to replace the moribund Defined Pension Scheme. It is fully funded by workers and employers and privately managed by Pension Fund Administrators. The monies are in the individual Retirement Savings Account (RSA). Therefore, it is significant that the consent of the workers is, at least, sought.
While infrastructure is a colossal asset around the world, and especially in most advanced countries in which private investors could invest Pension Fund and make high returns, here, infrastructure is yet to be an asset because Nigeria runs a dysfunctional economy, morbidly dependent on crude oil revenue. It is an economy that sustains enormous corruption and relies ponderously on the importation of goods and services that can effortlessly be generated here.
A recent Central Bank of Nigeria (CBN) report indicated that the Federal Government registered N4.62 trillion deficit in 2019. That year, its highest expenditure went on recurrent at N4.05 trillion out of a budget of N8.9 trillion. This is certainly an unworkable economic exemplification. A country which keeps allocating more resources to consumption cannot guarantee that the funds its government seeks to borrow will not be frittered on politicians and civil servants.
We firmly believe that the government does not have to borrow to erect or maintain infrastructure if it can cut on its garish lifestyle. For example, besides the prodigious sums expended on federal lawmakers, fuel subsidy alone cost the nation N2.95 trillion in 2018. With this, we find it hard to comprehend why the four refineries that gulped about $400 million between 2013 and 2015 cannot be auctioned to private investors who can run them efficiently.
Again, a report by the Debt Management Office (DMO) stated that as of September 2019, Nigeria had a debt profile of N26.21 trillion or $85.3 billion while debt servicing alone costs N2 trillion annually on average. This has more severely compromised the nation’s debt-to-GDP ratio. The obvious implication is that the current ratio cannot sustain  a serious borrowing any longer. So, what is the repayment plan for the N2 trillion when debt servicing guzzles so much?
In a surprisingly bold statement, the Federal Government claims it needs the N2 trillion to plough into infrastructural upswings like the rails, roads and power. These are desirable projects, no doubt, but it will be harmful to divert pension capital to them. In the first place, it doesn’t make sense to keep plunging public funds into power when in the privatisation exercise of November 2013, N1.7 trillion was disbursed to stabilise the sector without the anticipated result. The way it is, if the entire N2 trillion is assigned to the sector, no improvement may be recorded.
During the 2008 economic crisis, the Assets Management Corporation of Nigeria deployed N5 trillion to bail out some ailing firms. But because there is a consistent dearth of political will in the country, that large sum is yet to be recouped by various administrations till date. Why look elsewhere when this money is more than twice the N2 trillion being sought for? Furthermore, what happened to funds granted private organisations like the Aviation Fund and Textile Fund? Of course, they have gone down the drain and unaccounted for while the culprits walk unhindered.
It is a fact that pension depositories are used to construct infrastructure in developed countries, particularly those with a vast ratio of Pension Fund to GDP. However, with a Pension Fund to GDP ratio of 6.7 per cent, Nigeria cannot cut a slice of its pension reserves to invest in infrastructure without jeopardising workers’ fortune. To be suitable to do that, our infrastructure market must be developed and well regulated.
We express grave concern at the fate of Nigerian workers in the face of incessant borrowings by our governments without corresponding development. It is unthinkable to borrow from the Pension Fund when the citizens have not felt the impact of the mounting debts foisted on the country. What is paramount to contributors and other stakeholders alike is the safety of the Fund, which, unfortunately, government cannot guarantee. This action of government has the potential to threaten the scheme and erode contributors’ confidence.
Accordingly, we strongly apprise the federal government to think twice and desist from overstepping the Pension Reform Act 2004 to gratify its crave to build infrastructure. This was the issue with Argentina when its then President, Cristina Fernandez, manoeuvred the parliament and clutched the country’s $30 billion Pension Fund. Instantly, international investors’ confidence wiggled and the economy went into a free fall.
As the regulatory agency, the National Pension Commission (PenCom) should not subject pension revenue to undue hazard by granting political office holders access to the Fund. Like birds of passage, politicians have no stake in the pension money; as such, they have to be prevented by all means from intruding on the future of Nigerian workers. The government with their itchy fingers should maintain a distance from the pension proceeds to stave off Argentina’s ugly experience.

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Editorial

Domesticate FG’s Exit Benefit Scheme 

Published

1 week ago

on

April 10, 2026

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The recent approval of the “Exit Benefit Scheme” by the Federal Executive Council (FEC) stands as a landmark achievement for the administration of President Bola Tinubu. For many observers, this remains one of the most impactful and compassionate policies introduced by the current government. By restoring a sense of financial dignity to those who have dedicated their lives to national service, the administration has demonstrated a clear commitment to the welfare of the Nigerian workforce.
Under this new framework, retirees of the Federal Civil Service are set to receive a gratuity equal to 100 per cent of their last gross annual pay upon retirement. This policy, which officially comes into effect on 1 January 2026, ensures that Federal civil servants are not left stranded the moment they exit the office. It provides a vital financial cushion that has been sorely missing from the lives of many public servants for over two decades.
The primary objective of this scheme is to bolster financial security by providing a significant lump sum payment to eligible employees who have served for at least 10 years. Crucially, this benefit does not exist in isolation; it is designed to work alongside the existing Contributory Pension Scheme (CPS). This dual-layered approach ensures that the immediate transition into retirement is as seamless as the long-term pension disbursements that follow.
It is important to clarify that this new benefit is intended to complement, rather than replace, the current CPS managed by Pension Fund Administrators (PFAs). For years, the pure contributory framework left a void where the traditional gratuity once stood. By reintroducing this payment, the Federal Government is addressing a long-standing grievance regarding the adequacy of the total retirement package available to civil servants.
This policy marks a historic return to gratuity payments for Federal Civil Servants after a lengthy hiatus. Since the pension reforms of the early 2000s, the focus has been strictly on contributions, often leaving retirees with a “waiting period” that can be financially devastating. The return of the gratuity signals a shift back toward a more holistic view of worker appreciation and social security.
Indeed, this payment comes exactly 22 years after the introduction of the Contributory Pension Scheme in 2004. The two-decade gap saw many retirees struggle to adjust to life after service without a substantial initial payout. This intervention demonstrates the Federal Government’s ongoing commitment to policies that promote improved welfare and secure the future of the civil service in a tangible, measurable way.
By reversing the lack of gratuity inherent in the previous purely contributory model, the government has earned the rare and resounding praise of organised labour. The Nigeria Labour Congress (NLC) has rightly described this move as a major welfare upgrade. This endorsement highlights the alignment between the government’s policy direction and the actual needs of the Nigerian worker on the street.
We commend President Tinubu for this watershed approval. The new gratuity payment is a sincere reflection of the administration’s recognition of the dedication, sacrifice, and professionalism inherent in the Federal Civil Service. It acknowledges that those who build the nation’s administrative backbone deserve more than just a handshake and a promise of future monthly stipends when they finally step down.
However, the pursuit of social justice must not end with Federal workers alone. We strongly advocate that this initiative trickles down to the various states. The Governor’s Forum should meet as a matter of urgency to approve and adopt the Federal Government’s template. If the central government can find the means to honour its retirees, the states—who are the primary employers of the bulk of the nation’s workforce—should follow suit.
It is a painful reality that many workers retire from service today with nothing to take home on their final day. Pensions frequently take months to process, and in many jurisdictions, gratuities take “forever” to be disbursed. This is why the Exit Benefit Scheme is the true embodiment of Tinubu’s “Renewed Hope Agenda.” There is perhaps nothing that offers more hope to a weary worker than the certainty of a dignified exit.
Shamefully, several state governments are still battling with legacy gratuity payments from years past. Adopting a scheme like this would serve as an essential cushion while long-term arrears are settled. No citizen should face destitution or death simply because they rendered service to their government. It is time to end the era where retirees survive on mere trickles; even a modest lump sum can be the difference between a dignified retirement and a tragic one.
Specifically, we call upon the Rivers State Government to adopt this scheme to give life to its pensioners. The Federal Government has already provided the successful template; there is no need to reinvent the wheel. We must ask: if political office holders are entitled to generous severance benefits after just four or at most eight years, why should civil servants who serve for 35 years go without a similar “severance” package?
In Rivers State, the need for clarity is urgent. Workers who left the service after June last year face the uncertainty of whether they fall under the Defined Benefit Scheme or the Contributory Pension Scheme. The state government must resolve this administrative ambiguity immediately to prevent a full-blown pension crisis. Domesticating the Federal “largesse” should be straightforward, as Rivers is a state blessed with the necessary resources.
Governor Siminalayi Fubara, a former civil servant, understands the plight of the worker better than most. While we commend his administration for paying one of the highest minimum wages in the country, he has the opportunity to go further by becoming the first governor to implement the 100 per cent Exit Benefit Scheme. With this, he can ensure that Rivers State workers, who deserve the best, are truly rewarded for their service.
Let Rivers lead where others have lagged.
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Editorial

Task Before New IGP 

Published

2 weeks ago

on

April 2, 2026

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The appointment of Olatunji Disu as Inspector-General of Police following the resignation of Kayode Egbetokun marks a significant turning point for the Nigeria Police Force. Announced by President Bola Tinubu, the change in leadership comes at a time when the country is grappling with serious security concerns. Disu’s emergence has already drawn national attention, given both the urgency of the situation and the expectations placed upon him.
Upon confirmation of his appointment, Disu pledged to justify the confidence reposed in him. Central to his promise is a firm commitment to end impunity and enforce a zero-tolerance policy towards corruption within the force. Such assurances, though commendable, will ultimately be judged by the practical steps he takes in the coming months.
The new IGP also emphasised the importance of public cooperation in effective policing. He rightly noted that no police force anywhere in the world can succeed without the support of the people it serves. This acknowledgement highlights the critical relationship between law enforcement and the community, a relationship that has long been strained in Nigeria.
While congratulating Disu on his elevation, it is important to recognise the enormity of the task before him. He assumes office at a particularly difficult time, as underscored by the President during the decoration ceremony. Nigeria’s security landscape remains fragile, requiring decisive leadership and immediate action.
President Tinubu described the appointment as coming at a defining moment for national security. He urged the new police chief to restore public confidence and improve the institution he now leads. The expectation is not merely to maintain the status quo, but to leave the force better than he met it.
The security challenges confronting the nation are considerable. From banditry and terrorism to organised crime and communal conflicts, the threats are diverse and deeply entrenched. These issues have not only endangered lives and property but have also heightened public anxiety across the country.
Ironically, the police, who are meant to be at the forefront of restoring law and order, are themselves beset by internal challenges. Issues such as poor welfare, inadequate training, and systemic corruption have weakened the institution’s effectiveness. This dual burden makes Disu’s assignment even more complex.
A key priority for the new IGP must, therefore, be to restore peace and rebuild confidence, both within the force and among the general public. For many Nigerians, the police are no longer seen as protectors but as adversaries. This perception, whether wholly justified or not, must be urgently addressed.
Cleaning up the force and restoring its credibility will require more than rhetoric. Disu has already made the necessary commitments, but Nigerians will expect tangible results. Institutional reform must be thorough, transparent, and sustained if it is to yield meaningful change.
Equally important is the welfare of police personnel. Many officers operate under extremely poor conditions, with inadequate facilities and insufficient resources. Numerous police stations across the country are in a deplorable state, lacking basic equipment needed for effective policing.
No organisation can function optimally under such circumstances. If the police are to fulfil their constitutional mandate, they must be properly equipped and motivated. Addressing issues of welfare and infrastructure will go a long way in boosting morale and enhancing performance.
The list of challenges before the new police chief is extensive. From modernising equipment to improving training and discipline, the reforms required are wide-ranging. It is hoped that Disu will take the time to carefully assess these issues and implement practical solutions.
His appointment also comes amid growing calls for the establishment of state police. There is now a broad national consensus that the current centralised policing system is inadequate for addressing local security challenges. This debate has brought renewed attention to constitutional provisions governing policing in Nigeria.
While concerns about the potential pitfalls of state policing remain, its advantages appear increasingly compelling. Managing this transition, if it materialises, will be another critical responsibility for Disu. Ultimately, he assumes office with considerable goodwill, but his success will depend on his ability to translate promises into measurable improvements.
The success or failure of Olatunji Disu will be measured not by promises made but by results achieved. Nigerians yearn for a police force that is professional, accountable, and truly committed to their safety. If Disu can rise to this moment, confront entrenched challenges with courage, and drive meaningful reform, he will not only justify his appointment but also leave a lasting legacy in the annals of policing in Nigeria.
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Editorial

Nigeria: Cushioning Effects Of M’East Crisis 

Published

3 weeks ago

on

March 30, 2026

By

The ongoing crisis in the Middle East between the United States and Israel on one hand and Iran on the other has once again unsettled global stability, with escalating tensions disrupting oil production routes and threatening key supply chains. Conflicts involving major oil-producing nations and strategic waterways have created uncertainty in the international energy market. As history has repeatedly shown, instability in this region often sends shockwaves across the global economy, particularly in energy-dependent countries.
One of the most immediate consequences of this war has been a sharp rise in global crude oil prices. Brent Crude has surged between $105 and $110 per barrel in recent weeks, reflecting fears of supply shortages. This increase has translated into higher fuel costs worldwide, placing immense pressure on both developed and developing economies.
Nigeria, despite being a major crude oil producer, has not been spared. The country’s heavy reliance on imported refined petroleum products has meant that global price increases directly affect domestic fuel costs. Rather than benefiting fully from higher crude prices, Nigerians are grappling with the paradox of rising oil wealth alongside worsening living conditions.
The impact on the cost of living has been severe. Transportation fares across major cities have increased by over 50 per cent, while food inflation has climbed above 30 per cent, according to recent data from the National Bureau of Statistics (NBS). The ripple effect of higher fuel prices has touched every sector, from agriculture to manufacturing, making basic goods increasingly unaffordable for ordinary citizens.
In response to this growing hardship, the Nigeria Labour Congress (NLC) has demanded urgent intervention from the Federal Government to cushion the effects of the recent spike in petrol prices occasioned by the Middle East crisis. The call reflects widespread frustration among workers and the broader population.
The NLC made this demand in a statement titled “Save Nigerians From This Shock: An Urgent Relief Has Become Necessary,” signed by its President, Joe Ajaero. The statement underscores the urgency of the situation and highlights the growing disconnect between government policy and the lived realities of citizens.
We strongly support the NLC’s clarion call and urge the administration of President Bola Tinubu to take immediate and decisive steps to cushion the harsh effects of the crisis on Nigerians. Leadership at this critical moment requires bold, people-centred policies that prioritise national welfare over market orthodoxy.
One such step is the reintroduction of a fuel subsidy, funded by the gains from the current surge in global crude oil prices. The government could choose to subsidise either the finished petroleum products or the crude supplied to local refiners. Providing crude at reduced rates to Aliko Dangote refinery would significantly lower the final pump price for consumers.
This brings into focus the role of Dangote, whose refinery has the potential to transform Nigeria’s energy landscape. Dangote has stated that the Federal Government currently supplies only 30 per cent of the crude required for his refinery, compelling him to import the remaining 70 per cent. For a country that produces millions of barrels daily, this situation is both inefficient and unacceptable.
Beyond fuel pricing, there is a pressing need for direct support to workers. A cost-of-living allowance, a wage award, and targeted tax relief measures would provide immediate relief. At the same time, the government must take concrete steps to revive Nigeria’s dormant public refineries, which have long been a drain on public resources without delivering value.
The sharp rise in fuel prices, now selling at approximately N1,310 to N1,400 per litre in many parts of the country, has deepened economic hardship. For millions of Nigerians, daily survival has become a struggle. Without urgent intervention, the nation risks severe social unrest, as frustration continues to mount among the populace.
It is deeply troubling that the Federal Government appears to have left Nigerians at the mercy of volatile global oil prices triggered by the Middle East imbroglio. This situation has exposed the fragility of the downstream petroleum sector and highlighted the failure to build resilience despite decades of oil wealth.
As long as Nigeria remains tied to a market-driven pricing structure dictated by global fluctuations and continues to neglect its domestic refining capacity, it will remain vulnerable to external shocks. International conflicts and speculative market forces will continue to dictate the economic fate of Nigerian households.
Nigerian workers are being pauperised and subjected to immense suffering. They are not mere statistics; they are the engine of the nation’s economy. When that engine overheats, the entire system risks collapse. Ignoring their plight is not just unjust—it is economically reckless.
Finally, the estimated N30 trillion oil windfall expected from the current crisis must not be squandered as in the past. These resources should be transparently managed and invested in social protection programmes, infrastructure, and economic stabilisation. In addition, Nigeria must develop robust crude storage systems, as seen in other countries, to cushion future shocks. Failure to properly manage the energy situation could further accelerate inflation, compounding the already substantial burden on citizens.
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