The federal government has been urged to develop attractive infrastructure bonds that will guarantee the safety of pension funds which investment experts and government have been eyeing for infrastructural development.
The Pension Fund Administrators (PFAs) said at present in the country, there is no attractive infrastructure bond that can guarantee the safety of pension funds if invested in infrastructural development.
The administrators, who spoke at a media retreat organised in Lagos, said on the face of the dwindled income of government occasioned by fall in oil price, they are ready to assist the federal government to finance its infrastructural projects through the N5.3 trillion pension assets,
They, however, said this will be possible if government develops attractive infrastructure bonds that will guarantee the safety of the funds.
They noted that pension operators are not running away from financing infrastructure, stating that there is currently, no single infrastructure bond in the country.
Speaking on behalf of operators, the Chairman, Pension Funds Operators of Nigeria(PenOp), Mr. Eguarekhide Longe, said its members are ready to invest in infrastructure bonds whenever the government decides to float them to finance key developmental projects.
He promised that the pension fund managers are ready to engage with government to expand the economic space, even though, it is not their primary objective.
He added that, care must be taken not to invest pension funds in a project that will not regenerate returns, warning that “if pension fund is put in a project that does not regenerate return, the money would get lost and the project will not be delivered because it was not properly conceived.”
While debunking claims that PFAs don’t want to invest pension assets in infrastructure, he said the managers had requested the investment banking community to come out with products that abide by the investment guidelines in Pension Act, which operators can finance, noting that this has not been done.
“The fact is that there are ample provisions in the investment guidelines that allow for investment in projects, so to say, infrastructure, private equities and real estates, bonds, among others. But what has happened is not that the money is idle in the PFAs or that the fund managers have not looked for those projects. It is not their jobs to go and create projects, but we have actively sort the investment banking community to develop products that we can invest in,” he pointed out.
Earlier, Head, Investments, Pensions Alliance Limited(PAL), Mrs. Abimbola Sulaiman, said lack of investment options , bankable projects, transparency; shortage of data as well as high risk related greenfield investment among others, are challenges limiting investment of pension funds especially in infrastructure.