VP Yemi Osinbajo

The National Economic Council(NEC) has said that if the country continues its current level of budgeting for infrastructural developments, it may never have functional roads.

Gov. Nasir el-Rufai of Kaduna State said this while briefing State House correspondents after the NEC meeting presided over by Vice President Yemi Osinbajo, on Thursday at the Presidential Villa, Abuja.

He said NEC has therefore decided to set up a committee tasked with the responsibility of working out ways to leverage a portion of the N10 trillion accumulated pension funds for long-term investments in infrastructure to correct the situation.

El Rufai noted that in 2019 Budget for instance, the budget for construction and maintenance of federal highways was about N200 billion.

He also noted that the approved budget of 2020 for construction and maintenance of all the federal highways was something in the region of N169 billion.

He said that if the country continued budgeting N160 billion, N200 billion, N300 billion, even N500 billion, it would not have functional roads.

“We must find a way to unlock large amount of monies that can be used to reconstruct our highways and maintain existing highway; and we will not be able to do so with N100, N200, N400 billion every year.

“What we have found in every country that we virtually studied is that these highway infrastructures were constructed using long-term funds both by federal, state governments as well as the private sector.

“The question is where do we find this long term funds? when we started the pension reforms, when I was head of BPE in 2002, 2003, the whole idea was to fix a problem that faced Nigeria at the time.  People were dying queuing to receive their pensions.

“But in the process of solving that we realised that there is a long term opportunity through contributory pension schemes to accumulate large amount that can be used to invest in long term projects like infrastructure.’’

According to him, it is done in Chile,  South Africa and many other developed and developing countries.

He said that those countries used the pension funds as long-term funds to develop infrastructure and other key sectors of the economy.

“ And today, due to the reforms that we started around 2002, 2003, it culminated into the enactment of the Pension Reform Act in 2004.

“Today, as at December last year, Nigeria has about N10 trillion in its Contributory Pension Fund.

“This is long-term money, contributed by young people that have 20 to 30 years to retire;  so, the money will be there.

“ It is growing every month by between 100 and 200 billion; so, today, we are speaking of N10 trillion; in about a year, we will be speaking of N11 to N12 trillion; this is the beauty of pension funds,’’ he said.