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N1.6 tn Pension Funds: PENCOM, ICRC to collaborate on Infrastructure Finance

With accumulated pension contributions running to over N 1.6 trillion as at February 2010, the National Pension Commission is seeking collaboration with the Infrastructure Concession Regulatory Commission for massive investment in long-term infrastructure finance Economic Confidential, an on line publication has reported.

“The funds are accumulating by the day and we think it is appropriate to develop a framework that will enable investment of the funds in appropriate areas that can translate into economic growth for the country,” PENCOM Commissioner in charge of Technical Services, Miss. Eyamba Henshaw, said in Abuja .

Eyamba, leading a team of PENCOM management and representatives of the World Bank and the International Finance Corporation at a meeting with the Infrastructure Concession Regulatory Commission, described such window of investment as capable of creating more jobs and thus leading to more pension contributors and an eventual growth of pension funds. This move is coming barely a month after the Infrastructure Finance Office of the Central Bank of Nigeria suggested long-term infrastructure finance by insurance firms and pension fund administrators.

Henshaw noted that “the experience in Latin America with the use of pension contributions to fund infrastructure resulted in a lot of development”. She therefore called for sustainable collaboration between PENCOM and ICRC.

According to her, “Foremost in our approach in this direction is the safety of funds and then returns.” She stressed the need to protect pensioners against inflation using relevant instruments with support from theWorld Bank and IFC. ICRC Director General, Mr. Mansur Ahmed, described the proposed intervention of PENCOM in infrastructure finance as a timely development ‘in this time of globaleconomic downturn’.

On the relationship of the commission with state governments, the ICRC boss said discussions were ongoing with state governments on the need to develop framework for PPP and harmonising individual states policies for a basic national minimum standard.

“Our efforts are yielding fruits because the response from the states such as Lagos, Cross River, Niger, Kaduna and Rivers, is encouraging,” Ahmed said.


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