Opinion
That Pension Funds Loan
The chairman of Nigeria Governors Forum, Governor Kayode Fayemi of Ekiti State, may not be wrong in insisting that state governments have the right to borrow from the Pension Funds. Responding to a question on the news that the governors intend to borrow N17trillion from the pension funds on a national television he said, “There is no reason why state governments cannot access it, especially when they are going to be making available an irrevocable standing payment order for it.”
It is common knowledge that the pension funds are domiciled with Pension Fund Administrators who manage the fund. They invest them in certain approved investments like government bonds, treasury bills and other securities, shares of public limited companies, real estate development investments, loans and so on. In the past, the federal government and corporate bodies are said to have borrowed from the fund and the state governors may not be wrong in trying to toe the same foot step.
But will anybody blame pensioners, individuals and groups for kicking against the proposed action of the governors? No! The story of our leaders and their penchant of not obeying laws and court orders is not strange to any Nigerian. Many of our leaders behave as if they are above the law and do not keep to terms and conditions attached to whatever transactions they enter into. It is on record that three years after the N614 billion bailout fund was given to 35 states of the federation to help them pay their workers’ salaries and settle their pension obligations with a two-year grace period to repay, many states are yet to repay. So, what is the assurance that they will abide by the terms and conditions to be given by the PFAs for accessing the pension funds?
Most of the governors seeking this loan are in the last lap of their tenures. Can they repay N17 trillion before leaving office? How are we sure that their successors will be willing to inherit the burden of repaying the loan? What then becomes the fate of the pensioners who contributed this money should they refuse to pay?
Having a pension plan is one of the most secure insurance policies for workers’ future upon retirement. With the enactment of the Pension Reform Act 2014, pension became contributory whereby the employer and employees contribute a minimum percentage of the employees’ salary to the scheme every month. The minimum contribution for the employer is 10 per cent and eight per cent for the employee. The salary deduction has been religiously carried out by the states monthly. But painfully, many state governments have been defaulting in keeping to their own side of the bargain and in remitting the money deducted to pension administrators, making it difficult for workers to access their pension. Stories abound about how workers who retired after toiling for 35 years, approached their PSAs to access their pension, only to be told that their state governments did not remit their money.
Today, the same governors who failed to play their role in making retirement less stressful for workers after long years of service are planning to squander the fund in the name of using it for infrastructural development. Why must it be the workers who are poorly remunerated, whose salaries are delayed for months, who are denied their rights of promotion as and when due, that should sacrifice their pension funds for infrastructural deficit in the country? What sacrifice are the governors who claim to be so pained by the high level of infrastructural decay in the country making to better the situation? Many of them are still adamant on continuing with the outrageous pension packages for former governors and their deputies which milks the states’ treasuries apparently because it will benefit them.
Yes, we know that borrowing is part of economic development,yet misappropriation and mismanagement of loans is what constitutes nuisance to economic policies. There is hardly any state which does not owe either a bank or one foreign financial institution. We have become debtors and beggars. What they have done with all the previous loans is not known to many. It is, therefore, high time our leaders both at the federal and state levels thought of other ways of generating revenue for whatever project they want to embark on instead of borrowing all the time.
Some analysts have posited that if those in authority at all levels should sincerely fight corruption and embezzlement of public funds, cut down their expenses and huge security votes, reduce cost of governance, the states and the nation at large will be very buoyant. There is no better truth. Corruption is the bane of our development and unless it is drastically tackled, no meaningful development shall be seen irrespective of how many millions of naira we borrow.
It is also high time the governors joined in pushing for more powers from the 64 exclusive list which is being controlled by the federal government. Every state in the country is blessed with one natural resource or the other and if the states are given the power to manage some of these resources, the cases of going cap-in-hand to seek for who to lend us money for infrastructural development both as states, and as a nation, will minimize.
President Muhammadu Buhari should, therefore, harken to the request of the Socio-Economic Rights and Accountability Project (SERAP) and use his “good offices and leadership position to urgently instruct the Director-General and Board of the National Pension Commission [NPC] to use their statutory powers to stop the 36 state governors from borrowing and/or withdrawing N17 trillion from the pension funds purportedly for ‘infrastructural development.’
But if the governors must have their way, which will not be surprising, it should be agreed that a bulk sum of this money should be deducted from their monthly FAAC allocations even after the expiration of the tenures of current governors; that any state owing pension arrears of civil servants should not be entitled to the loan; that any state that does not have means of generating 70% of the loan through IGR should not be part of the loan.
By: Calista Ezeaku
Opinion
Humanity and Sun Worship

Opinion
When Global Peace Hangs In The East

Opinion
Balancing Religious Freedom and Community Rights

Quote:”Communities have rights to peace, safety, and quality of life. Noise pollution, crowds, or other impacts from religious activities can affect these rights. Balancing these interests requires consideration and dialogue”.
-
Politics4 days ago
2027: Bayelsa APC Adopts Tinubu As Sole Candidate … As Lokpobiri, Lyon Shun Meeting
-
Sports4 days ago
GOtv Boxing Night 34 holds Dec. in Lagos
-
Sports4 days ago
WCQ: NFF Denies Post Match Statement
-
Politics4 days ago
Alleged Smear Campaign Against Yakubu, CSOs Demand Apology From Uzodimma
-
Politics4 days ago
2027: Jega Condemns Premature Campaigns, Blames Elected Officials
-
Politics4 days ago
Why INEC Can’t Punish Politicians For Early Campaigns – Yakubu
-
Politics4 days ago
Stopping Natasha’s Resumption Threatens Nigeria’s Democracy – ADC
-
Sports4 days ago
Gov. Decries Delta’s Poor Performance At 2025 NYG