The National Pension Commission (PenCom) has identified gaps in infrastructure projects qualifications as one of the key challenges militating against the deployment of pension savings to infrastructure development.
The Commission disclosed that currently, less than five per cent of the 20 percent of the N8 trillion pension fund earmarked for investment in infrastructure had been accessed.
The Acting Director-General of PenCom, Mrs. Aisha Dahiru-Umar, who rued the situation, noted that there were few qualified infrastructure projects and instruments, such that allocated funds are under-utilised.
According to her, low liquidity; inadequate credit risk rating; crowded effects and other factors are hampering the growth of local corporate bonds, necessitating the concentration of pension funds in government securities.
To reverse the trend, Dahiru-Umar, who was represented by Head, Contribution & Bond Redemption Department, PenCom, Olulana Loyinmi, canvassed the creation of more investment outlets such as infrastructure bond/funds with appropriate credit enhancements.
The PenCOm boss, who made these remarks at the Chartered Insurance Institute of Nigeria (CIIN) 2018 June Edition Breakfast Seminar in Lagos, restated the availability of pension fund for development of infrastructure, stressing that the fund remains a veritable tool to enhance the nation’s ongoing economic initiatives,
She clarified further that out of the 20 percent of pension funds available for infrastructure financing, infrastructure bonds have a share of 15 per cent while Funds, five per cent.
In her remarks, President, CIIN, Funmi Babington-Ashaye, noted that annuity and pension funds constituted a major source of institutional investments, adding that such funds, given their long term nature, can be channeled to transportation, communication, water and electric systems infrastructure projects.