The Socio-Economic Rights and Accountability Project (SERAP) has urged President Muhammadu Buhari to instruct the Director-General and Board of the National Pension Commission (PENCOM) to use their statutory powers to stop the 36 state governors from borrowing or withdrawing N17 trillion from the pension funds purportedly for ‘infrastructural development.”
The organisation said this in a letter dated December 5, 2020, and signed by SERAP deputy director Kolawole Oluwadare.
The organisation said, “Allowing the governors to borrow from pension funds 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.”
SERAP said, “It is patently unjust and contrary to the letter and spirit of the Nigerian Constitution 1999 (as amended), the Pension Reform Act, and the country’s international anti-corruption and human rights obligations for the federal government and state governors to repeatedly target pension funds as an escape route from years of corruption and mismanagement in ministries, departments and agencies.”
SERAP 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.”
Part of the letter read, “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.
“Allowing the governors to borrow money from the pension funds would amount to a fundamental breach of constitutional provisions, the Pension Reform Act, and Nigeria’s international obligations, as well as fiduciary duties imposed by these legal instruments on all public officers to prevent pension funds from unduly risky investments, and to ensure transparency and accountability in the management of pension funds.”
According to the group, “We would be grateful if your government would indicate the measures being taken to instruct the NPC to stop the 36 state governors from borrowing and withdrawing any money from the pension funds within 14 days of the receipt and/or publication of this letter.”
“If we have not heard from you by then as to the steps being taken in this direction, the Registered Trustees of SERAP shall take all appropriate legal actions to compel your government to implement these recommendations in the interest of millions of Nigerian pensioners.”
The governors last week reportedly proposed to borrow around N17 trillion from the pension funds after receiving a briefing from the Kaduna State Governor, Mallam 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.