SERAP to Block Use of N17trn Pension Funds by Governors
By Modupe Gbadeyanka
The plan by the 36 state governors to borrow N17 trillion from the pension funds is not going down well with the Socio-Economic Rights and Accountability Project (SERAP).
The group has now written an open letter to President Muhammadu Buhari to block this move, arguing that this would be “detrimental to the interest of the beneficiaries of the funds, especially given the vulnerability of pension funds to corruption in Nigeria, and the transparency and accountability deficits in several states.”
In a letter dated December 5, 2020, SERAP, through its deputy director, Mr Kolawole Oluwadare, described this proposed plan by the governors as “patently unjust and contrary to the letter and spirit of the Nigerian Constitution 1999 [as amended] and the Pension Reform Act.
According to the organisation, “This proposed borrowing faces the risks of corruption and mismanagement, and would ultimately deny pensioners the right to an adequate standard of living and trap more pensioners in poverty.”
“Rather than devising ways to address pensioner poverty, governments at all levels would seem to be pushing to exacerbate it,” the letter said.
SERAP, which copied the Attorney General of the Federation and Minister of Justice, Mr Abubakar Malami, expressed “serious concerns that the proposed borrowing by the 36 state governors from the pension funds would lead to serious losses of retirement savings of millions of Nigerians.”
According to the group, “Many state governors have repeatedly failed to pay workers’ salaries and pensions; several states are failing to pay contributory pension.
“Therefore, allowing state governors to collect a windfall of pension funds at the expense of pensioners who continue to be denied the fruit of their labour would amount to double jeopardy.”
“Fiduciary duties require public officers to ensure that pension funds are managed solely and exclusively for the benefit of pensioners, and to consider the socio-economic and human rights impact of pension investment decisions on the intended beneficiaries,” it added.
SERAP said President Buhari must urgently instruct the Director-General and board of the National Pension Commission (NPC) to stop this move because “it would also be very difficult to hold state governors to account for the spending of pension funds, as states have persistently failed to account for the spending of public funds including security votes.”
“Transparency is a key instrument in the spending of any pension fund investment, as it is necessary to ensure the accountability of the funds. However, several states routinely claim that the Freedom of Information Act is not applicable within their states.”
“Pension funds should not be used to make up for the failure of governments at all levels to cut the cost of governance, and the persistent refusal to reduce wastage and corruption in MDAs, as well as failure to obey court orders to recover life pensions collected by former governors and their deputies, and public funds collected by corrupt electricity contractors who disappeared with the money without executing any power projects,” the group submitted.
Recall that recently, the Governor of Kaduna State, Mr Nasir el-Rufai, who is the Chairman of the National Economic Council Ad Hoc Committee on Leveraging Portion of Accumulated Pension Funds for Investment in the Nigeria Sovereign Investment Authority (NSIA), stated that N17 trillion could be sourced from the pension funds for projects in the states.