The Federal Executive Council (FEC), yesterday gave an approval to the Debt Management Office (DMO) to raise N758 billion bond to clear backlog of pension liabilities for all categories of pensioners.
FEC also approved a 30 million euro long term concessional financing by the French Development Agency, to support students in the area of accommodation in conjunction with family homes limited as the partner and implementer .
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed this while briefing State House correspondents at the end of Council meeting presided over by President Bola Tinubu at the Council Chamber Presidential Villa Abuja.
The Minister said that the N758 billion approval to clear pension liabilities will serve as a relief to the beneficiaries who were owed funds under the defined benefit system that preceded the contributory pension scheme which came into force in 2004 and updated with a new act in 2014.
He explained that people who were on a defined benefit scheme yet to retire would need a top up of their contributions or the amount due to them every time that there was a wage increase every five years.
According to him: “Secondly, and equally important and addressing the issue of social interventions is one regarding pensions, there was an approval for the government through the debt management office to raise a federal government bond of about 758 billion naira.
“And that is to clear up the backlog of pension liabilities owed various categories of pensioners who are owed funds under the defined benefit system that preceded the defined contributory pension scheme that came into force in 2004 and of course, was updated with a new act in 2014.
“There were some accrued liabilities which were building up over time. So, for example, someone who was on a defined benefit scheme yet to retire, would need a top up of their contributions or the amount due to them every time that there was a wage increase, every five years or so.
“So this liability that built up to a point where it was not going to be easy to pay them down on an ongoing basis, and so to clean up that important area and to give people their right, which is payment of the pension liabilities as and when due, the government has put in place an approval for debt management office to raise 758 billion naira that will pay down all these liabilities and of course, be a tremendous relief to the beneficiaries.”
The Minister explained that quite a large number of memos were presented for approval which had to do with completing or implementing, the draft borrowing plan yet to be finalized but to be implemented during the course of the year, after finalization of appropriation.
“I will just highlight particular approvals. First of all, a 30 million euro financing, long term concessional financing by a Axon France, the French Development Agency, which is supporting student housing in conjunction with family homes formed limited as the partner and implementer
“It is for tertiary student accommodation at project sites throughout the country to provide sustainable and clean energy based accommodation for students.
“We all know what an important intervention that is for the educational sector and for students, given the shortage,” he said.
On the economic growth and economic resilience side, he said, “an approval has been given for the all important National Single Window Project. So the technology providers, the hardware suppliers, have been approved for implementation of the project.
“Some aspects will take 12 months for delivery of the hardware and for complete implementation, including the software solutions and the technology solutions and the E government solutions that will take up to 24 months and this project not only speaks to improving the economic competitiveness the international ability to export efficiently, and of the of the Nigerian economy.
“It also speaks to increasing government revenue. So it’s both on the on the fiscal side, it is both revenue earning in terms of Foreign exchange and in terms of government revenue, it speaks to the increased productivity of the Nigerian economy, as I said before, increased international competitiveness at a time where under the African continental Free Trade Agreement, Nigeria is pushing to be a big player, both in the ECOWAS region and in the African continent as well.
“Why that is particularly important, we are all seeing that the world is moving away from open trade, from the rules based world trade organization led, world trading environment is moving to a more closed environment, and so the regional and the continental markets will be that more much more important for Nigeria.
“Finally, we also commented that given the plethora, the large amounts of approvals which were given today, that there was the assurance also given that the economic management team is going to harmonize, synthesize, synchronize, and very much prioritize in an orderly fashion, these different approvals in line with Mr. President’s priorities.
“First of all, to attract investment that will grow the economy and create jobs and reduce poverty, but more importantly, to also focus on his immediate priorities for stabilizing for now, implementing what will strengthen the Nigerian economy and grow it and create jobs in the near term.
“Such as, strengthen food security, enhancing fiscal the fiscal condition, including, as we have seen, the revenue benefits that can come from the National Single window project, increased energy security, strengthen social protection, improved economic competitiveness, as I said earlier, and finally, timely implementation of the new national development plan, so that we all have a framework in which to implement the various programs and policies of the government, and also to be able to show to all stakeholders the direction in which the government is going, and as we clearly know, the benefits of the reforms are beginning to come through, there is greater fiscal strength, there is greater competitiveness of the Nigerian economy.”
