Nigeria is already on the cross road with huge financial burden and declining revenue.
According to the Debt Management Office (DMO), Nigeria’s Total Public Debt Stock as of June 30, 2022, was N42.84trillion ($103.31billion).
It is instructive to recall that Nigeria’s debt service cost presently outweighs its revenue with clear signs of economic dangers ahead. There are implications for this rising debt stock in Nigeria with total external debts amounting to about $40billion and a private credit composition of $15.9billion which represents 39.8% of total external debt stock.
Eurobonds take the bulk of the commercial loans with a total portfolio of $15.62billion.
With the refusal of private creditors to embrace debt relief initiatives, the Nigerian
government will continue to spend a significant part of its budget to service loans to
private creditors under very stringent conditions, including high interest rates. This has drastically reduced due commitment to more critical socio-economic sectors like
Health, Education. Further to this, the Federal Government projected debt servicing to cost N10.43tn by 2025, according to the 2023-2025 MTEF/FSP document.
Pension burden has significantly impacted government expenditure creating a yawning infrastructure gap.
Nigeria’s pension industry has grown over the last 18 years since the Pension Reform Act (PRA) was initially enacted in 2004.
The industry has ensured that the average Nigerian worker is able to retire in peace and dignity.
The act brought about the professionalization of pension fund administration and the growth of the pension industry in Nigeria. There are many gains that the pension industry has achieved and there is a great need to protect these gains from individuals seeking personal gain.
Over the last number of years, it has been observed that many actors try to reverse these gains, usually from seeking to amend the act that would allow groups of people to leave the scheme.
These acts are typically done through legislative actions as certain groups sponsor bills to exit the Contributory Pension Scheme (CPS)
Reports have come indicated that a “Bill for an Act to amend the Pension Reform Act, 2014, to Exclude/Exempt the National Assembly Service from the Contributory Pension Scheme and Establish the National Assembly Service Pension Board; and for Related Matters (HB 2025)” has been passed by the House of Representatives to exempt the National Assembly staff from the Contributory Pension Scheme by establishing a National Assembly Pension Board.
Though it is not confirmed that this bill was passed in “good” faith, Oriental News Nigeria also believe that an important bill of this nature, should go through the standard and due legislative processes.
One of such processes is the convening of a public hearing where all stakeholders that are affected by the bill are invited to discuss and engage.
All the stakeholders like the workers union, labour, the Pension Fund Operators, the Regulators, Employers of labour and other critical stakeholders were not engaged in the process.
This news platform observed that some principal officers of the House who normally should oversee the passage of bills were unavoidably absent, bringing the integrity of the process into question and we are pushed to question whose interests this bill is geared to serve.
It needs to be ascertained, why the bill was passed without the crucial input of citizens and stakeholders? This breach of sacrosanct legislative processes and the rather hurried passage of this bill, triggers serious concerns and should be revisited urgently in the interest of both National Assembly staff, the pension industry and the nation in general.
As a matter of fact, there are a number of proposed amendments to the current pension act that have been proposed within the house for a number of years. So, for this bill to pass quickly, while the others left unattended to speaks to ulterior motives.
It is pertinent to note that the Federal Government had earlier issued a white paper stating that the Police Force or any other government agency should not leave the Contributory Pension Scheme as the scheme was the Federal Government’s way to have structured and sustainable pensions for its employees.
Furthermore, economic analysis and actuarial reports have shown that it would be impractical and irresponsible to move the police or other sectors of the Federal Civil Service from the current Contributory Pension Scheme (CPS) to a Defined Benefit Scheme (DBS) because of the amount of funds this would cost, the fiscal position of the government and the effect it would have on future retirees.
So, this makes this recent bill to exit the National Assembly staff quite puzzling and at a cross purposes with the Fiscal situation of the country or the stated position of the executive.