Lagos — The pensions reform carried out by the Olusegun Obasanjo government must remain a high point in assessing what conventional wisdom regards as a lack-lustre administration. The reform will, for a long time, be regarded as a turning-point in the social history of Nigeria. It was overdue and very much needed. The public had become used to the heart wrenching stories and sordid photographs of pensioners dropping dead on queues. The new era instituted by the pensions reform is supposed to bid goodbye to all that.

Sadly, as is their wont, a callous cabal seems determined that Nigerians must remain glued to that past. This cabal must be stopped in its tracks. For this reason we cannot but applaud the Independent Corrupt Practices and Other Related Offences Commission (ICPC) for instituting a probe into an alleged N90 billion pension fraud in the budget office of the Federal Ministry of Finance.

The probe must be thorough and there must be no sacred cows, for if the pension re-structure is interfered with or truncated, the consequences will be dire. It will amount to a devastating setback. More importantly it will have grave consequences for the nation's economic stability. Pension funds are a decisive element in a nation's economy. In personal terms, they provide a well structured shield for the future after a productive working life. This means that any disruption to their smooth operations will mean that a vital social safety net is (and the word is used advisedly) being confiscated. In addition, the pension reform ensures a long-term pool of funds crucial to the development of the economy. This pool will furnish an opportunity to develop long-term bond markets (both municipal and corporate) as well as develop and sustain, at last, a mortgage financing system vital to the nation's housing delivery system. It is important too if we are going to develop a home-owning democracy.

If, as is being alleged, there is a pension fraud of the magnitude of N90 billion in the Finance Ministry, questions, very crucial ones, must be answered. For a start, what on earth has happened to procedures and internal controls? N90bn is certainly not a small amount of money. Therefore we must call for a categorical statement from the pensions regulator, Pencom, as to the effectiveness of its regulatory functions. This is because no one wants a repeat of the cataclysm now threatening the banking sector. Already, pension funds which were invested within the statutorily allowed limits, are feeling the pains of the stock-market upheaval. We certainly do not want to add to this, unplanned-for tribulations.

If the allegations prove to be true (we certainly hope not) then we have on our hands another systemic failure. The funds being probed are said to be the N81 billion the Federal Government claimed to have released in September 2008 as pension arrears, and the N9 billion owed pensioners since 2000. The pension beneficiaries, who allege that the fund managers have been colluding with an insurance company, officials of the Ministry of Finance and those of the Ministry of Health, to defraud the affected pensioner of billions of naira, deserve commendation for their vigilance. It once again shows the need for a Whistle-blowers Act as well as the speedy passage of the Freedom of Information Bill. The two mechanisms are pre-emptive and sorely needed for early detection of fraud. We urge the National Assembly to expedite work on both. This is because there is no reason to continue the valiant but self-defeating proposition of closing the stable doors after the horse has bolted.

The ICPC is to be commended for wading into the matter. The enquiry should be done however in full public glare. What we now understand in the light of recent debacles is the need for stronger, technically equipped independent regulators. For this reason the regulators of the pension sector must be strengthened. As Pension Funds grow in geometrical proportions in the years ahead, their regulation is very important. All issues relating to operations of Pension Funds must be open to public scrutiny. This will involve crucially the appointment of insurance companies, custodians, managers and so forth. The ICPC probe offers an opportunity to open up a lot of issues for clarification.

The probe must be conducted openly and in the full public glare.