According to the Nigerian government, N758 billion in bonds will be issued to pay off accrued pension debt.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, told reporters in Abuja on Tuesday that this covers debts outstanding under the previous Defined Benefit Scheme before the implementation of the Contributory Pension Scheme in 2004.
Edun gave a briefing to State House correspondents following the 23rd Federal Executive Council meeting at the Aso Rock Villa in Abuja.
He stated that the Nigerian government, through the Debt Management Office, will issue bonds worth roughly N758 billion to settle accrued pension debts owed under the previous Defined Benefit Scheme after taking into account measures to address outstanding pension liabilities.
He clarified that these obligations had accrued over time as a result of sporadic pay raises and that paying them off would provide long-overdue relief to the impacted retirees.
Edun asserts that pensions are “an equally important issue of social interventions.
“The government was authorised to issue a Nigerian government bond for approximately N758 billion through the Debt Management Office. That is to pay off the backlog of pension liabilities owed to different types of retirees who were owed money under the Contributory Pension Scheme, which was modified with a new act in 2014, and the defined benefit scheme that came before the defined contributions.
“Over time, some accumulated liabilities were increasing. A person who was enrolled in a defined benefit plan but had not yet reached retirement age, for instance, would require a top-up of their contributions or the amount owed to them each time their pay increased, which would happen roughly every five years. Therefore, it would be difficult to pay them down over time because of the accumulation of this debt.”
Additionally, the council authorised a long-term concessional finance agreement from the French Development Agency worth €30 million (N46.30 billion).
Edun clarified that the financing, which is being carried out in collaboration with Family Homes Fund Limited as the executing agency, is to alleviate the severe lack of student housing by supplying clean-energy-based, sustainable student housing at different postsecondary institutions across the country.
“In partnership with Family Homes Fund Limited, the partner and implementer, we received €30 million in long-term concessional funding from a French development agency that supports student housing.
“We all know what an important intervention that is for the educational sector and students, given the shortage.
“It is for student tertiary accommodation at project sites throughout the country to provide sustainable and clean energy-based accommodation for students,” he said.
Regarding economic growth and resilience, the Minister declared that the National Single Window Project, an initiative aimed at enhancing the competitiveness and effectiveness of Nigeria’s export procedures, has been approved by the Nigerian government.
According to him, the hardware and technology suppliers for the project have been permitted to move on.
While the whole software, technology, and e-government components will be implemented over 24 months, the hardware components are anticipated to be delivered in around 12 months.
The Minister claims that, particularly in light of the African Continental Free Trade Agreement, the National Single Window Project will increase government revenues and the competitiveness of the Nigerian economy internationally.
“It speaks to raising government revenue as well,” he clarified. “From a fiscal perspective, it encompasses both government revenue and foreign exchange earnings.
“In an era when Nigeria is striving to become a major force in the ECOWAS region and on the African continent under the African Continental Free Trade Agreement, it speaks to the country’s economy’s enhanced productivity and, as I previously stated, its increased international competitiveness.
“Why is this significant in particular? Regional and continental markets will become even more crucial for Nigeria as we all see the globe shifting away from open trade and the rules-based, globe Trade Organisation-led global trading environment towards a more closed one.”
The Minister stressed that the economic management team will prioritise and harmonise each project by the President’s immediate goals, considering the amount of approvals. These include increasing food and energy security, lowering poverty, luring investment, and generating jobs.