Business a.m.
The federal government has announced plans to unlock N20 trillion from the nation’s pension funds to finance critical infrastructure projects across the country,aimed at stimulating economic growth.Â
Wale Edun, the finance minister and coordinating minister of the economy, made the disclosure following the Federal Executive Council (FEC) meeting chaired by President Bola Tinubu at the Presidential Villa.
Edun highlighted the importance of investing in infrastructure as a crucial factor in driving economic growth, especially in the face of high inflation and interest rates. He stated that the initiative to tap into the over N20 trillion pool of long-term funds available in Nigeria’s pension, life insurance, and investment funds aligns with President Bola Tinubu’s broader economic reforms aimed at stabilising the economy.
To successfully implement this plan, the minister underscored the need for close collaboration between the government and private sector players. According to him, by working together and leveraging available resources, the government intends to foster investment in critical areas such as housing, power, rail, roads, water transport, and technology.
Edun emphasised the importance of exploring domestic funding sources, particularly the over N20 trillion pool of long-term funds available within Nigeria’s pension, life insurance, and investment funds, before seeking foreign investments. He noted that by prioritising local resources, the government aims to maximize the potential of the nation’s existing assets and foster sustainable economic growth.
He stated: “The life insurance and investment fund industry. Generally, there are offers of 20 trillion Naira available, or much of it is in short term funding that doesn’t need to be quite sure money is long term. People save over their lifetime for their pension.
The minister also detailed the government’s infrastructure financing model, which centers on utilising Nigeria’s large corpus of domestic savings to fund critical projects in housing, power plants, rail, highways, and cutting-edge technology infrastructure.Â
Edun made known that the government, in close consultation and cooperation with the private sector, has reached an agreement to fund growth through investments in infrastructure, including housing provision and long-term mortgages. These mortgages, he explained, will be offered with a 25-year term at relatively low-interest rates, making them more accessible to citizens.
The minister further explained that initially, the government will provide support, particularly during the current period of high-interest rates. This support may come in the form of guarantees or other measures. However, as interest rates eventually come down, the need for government intervention is expected to decrease.
