Nigerian government invests in retirement account to borrow 8.29 trillion naira despite public resistance Nigeria news

  • In 2019, the federal government announced its intention to borrow 2,000 billion naira from pension funds to support infrastructure projects.
  • The proposal sparked widespread outrage with Nigerians overwhelmingly opposing it, prompting the government to abandon plans
  • Nonetheless, the Nigerian government continues to borrow indirectly from the pension fund through investment securities.

The federal government borrowed a whopping 8.29 trillion naira from pension fund assets, which stood at 12.9 trillion naira at the end of August 2021.

However, an earlier attempt by federal and state governments to borrow directly from pension funds has met with strong public resistance.

However, the federal government pursued its strategy indirectly through investments in securities.

Pension pot Credit: Nora Carol Photography

Investments in securities include bonds, treasury bills, agency bonds, Sukuk bonds and green bonds

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According to a Leadership journal report, pension fund investments in federal government securities still accounted for the bulk of 64% of total pension fund assets, crowding out investments in other sectors of the economy.

The report noted that government borrowing increased by 220 billion naira in one month, from 8.51 billion naira in July 2021 to 8.29 billion naira at the end of August 2021.

Pension fund debt is part of the federal government’s total domestic debt, which stood at N17.6 trillion at the end of June 30, 2021.

Bank loans to government

Similarly, the data from the Central Bank of Nigeria revealed that bank loans to government reached 13.03 trillion naira in September 2021

The amount of money borrowed in September is N307 billion, 2.93 percent more than the N12.6 trillion reported in August.

Benue is listed as one of the states that owe the retiree tip backlog

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Udom Emmanuel presents budget estimates of 582 billion naira to Akwa Ibom House of Assembly for 2022 in a related story, Benue is one of the states in Nigeria that owes retirees a backlog of gratuities.

As the report went to media, retirees in the north-central state said they owed 34 months of pension arrears.

It was also revealed that local government retirees also owed 72 months of state pension arrears.

Source: Legit

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