by  Lanre Ogundimu

The drive to sanitize Nigeria’s pension sector will appear to be an unending venture. In fact, it was the crisis that engulfed the sector, largely characterized by sharp practices and massive embezzlement by officials that gave birth to the National Pension Commission (PenCom) through the Pension Reform Act (PRA) 2014.

The main objective was to ensure effective administration of the Nigerian Pension Industry. The commission is empowered by the PRA 2014 to superintend on all pension matters in Nigeria including supervision and regulation of the Contributory Pension Scheme (CPS) and the old Defined Benefits (DB) Scheme as well as the Pension Transitional Arrangement Directorate (PTAD).

Since the implementation of reforms in the sector, the Nigerian Pension Fund has grown from base to one of the largest on the African continent in less than 2 decades but the infrastructure gap keeps growing in spite of this potential for investment in the sector.

This is partly because PenCom as an institutional investor that manages pensioners and would-be pensioners’ funds is extremely risk averse even with its ability to fund long term investment projects.

It presupposes that the potentials in the sector have not been fully utilized given the number of resources pooled to the sector over the years.

Nigeria, according to 2017 first quarter GDP and inflation reports is on the path of economic recovery although infrastructure gap still exists. These gaps must be closed in order to remove barriers to doing business for the overall reduction of transaction cost.

In any economy all over the world, it is less likely for private investors to internalize the cost of infrastructure while paucity of funds on the path of governments, culminate in inadequate budgetary allocation for infrastructure.

This brings to the fore the infrastructure financing model wherein pension funds can be deployed to play a catalytic role because of the substantial funds they hold and their ability to issue long-term debt instruments that are apt for large scale infrastructural development. The good news is that Nigerian Pension Funds holds about N7 trillion albeit, risk averse.

The APC led administration has come up with its Economic Growth and Recovery Plan and all the arms of government have agreed on the diversification of Nigeria’s economy. But to improve its manufacturing base, state-of-the-art hard-infrastructure must be put in place to attract the much needed Foreign Direct Investment which will provide jobs, generate foreign exchange with its multiplier effect on the economy.

For this effort to be realized, appropriate diagnosis of the country’s infrastructure needs is worth embarking on and how to finance such is highly crucial.

PenCom currently is in dire need of a helmsman, a man of competence like Mr Dorhety that will be able to take up the challenge of efficient and effective management of pensioners’ funds while also supporting government economic recovery and infrastructure investments plan.

A man who led ARM Pensions to a commanding height has been pencilled to lead PenCom to deliver on the commission’s mandate in collaboration with government. This man already has credible track-record in the industry and his nomination can be equated to that of meritocracy by putting round pegs in rounds holes

There is no question at all that the personality to lead PenCom should have the requisite technical and organizational skills needed to continually make the organization a dynamic one adopting strategies that will enable the Commission assist government to close infrastructure gap while protecting the interest of pensioners.

Therefore, the appointment of whom to lead PenCom should not be subjected to parochial politics, nepotism let alone a show of deep animosity against the appointee or nominee; but the capacity of the agent to adequately deliver on behalf of his principal without moral hazard.

The focus should be on the person’s capacity to deliver on the commission’s mandate as enshrined in the PRA 2014 and of recent, the need to assist government address the huge infrastructure gap through an arrangement that does not jeopardize the safety of the pensioners’ fund.

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Op–ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija

Lanre Ogundimu writes in from Abuja, Nigeria. He is a Public Affairs Analyst