The National Pension Commission (PENCOM) said it planned to deploy at least 40 per cent of the total pension funds in the country (about N2.32 trillion) into investments in infrastructure development by 2019.
Total pension assets in Nigeria as at July 2016 stood at N5.8 trillion and this accounted for about 6% of the country’s gross domestic product (GDP).
The Director general of PENCOM,Mrs Chinelo Anohu-Amazu who noted the current huge infrastructure gap in the country across critical areas of the economy, said there was high correlation between the level of infrastructure development and level of economic growth and performance.
She attributed the large infrastructure deficit in key sectors of the economy to population growth, demographic changes and urbanization, which have increased the demand for infrastructure in the country.
“Infrastructure is a potential avenue for pension funds to reap higher and consistent returns on investment,” she said. “If adequate policies, structures and regulations are instituted, pension fund investments in infrastructure and real estate development, provide veritable avenues for portfolio diversification as well as properly match pension assets with their future liabilities.”Although the federal government’s allocation in the 2016 to capital expenditure increased to 26.2 per cent, or about N1.59 trillion, she said the Federal Ministry of Finance annual infrastructure needs estimate was about N7.3 trillion.
The only way to attempt to bridge the gap, she said, was through the use of part of the pension funds to execute projects to add value to the quality of life of the people.
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