24 September 2018

Nigeria: Insurance Firm Boss Urges Govt Policies to Borrow From Pension Assets

The managing director/CEO, IEI Anchor Pensions Ltd, Mr. Glory Etaduovie, has called on government to provide policies that would allow it take advantage of the over N8.2 trillion pension assets.

This, according to him, would allow government better borrow from the pension fund to fix the country's infrastructural challenges and meet its financial needs in a bid to grow and develop the nation's economy.

Speaking at a forum in Lagos recently, Etaduovie said, "While the funds are available, accessibility would require the strong comfort that accountability would guarantee. The people's future is tied to it, lest its purpose be defeated and contributors lose faith in the Industry."

Consequently, he stressed that the sanctity of the funds must be maintained, if the current advantages are to remain.

Stating that the pension industry provides a pool of usable funds that, in Nigeria, have accumulated over N8 trillion and still growing, with a chosen average 20 per cent growth annually, he expects the figure to double in the next five years. At the current exchange rate to the dollar, he said, this was about half of the national foreign reserves, while the amount also competes with 2018 national annual budget which was N7.3 trillion, noting that the funds are there for use, though not without conditions.

Pension, he said, has played a great social role affecting people's lives at retirement when they can no longer work to earn money by providing a steady regular income. "The aged are helped to maintain some self respect and depend less on children who, in present day, may be jobless themselves thus also unburdening them emotionally and financially. It is also no news any more that Pension has become a great player in funding development projects, growth sustenance of many nations' businesses as institutional investors, as well as being employers of labour," he pointed out.

The pension fund, he stressed, has created an enabling environment for a whole lot to happen in the business world from its core objective of social security for the elderly, provision of long term funds for investment in the private sector to availability of funds to Government for critical infrastructure development.

He, however, called on the pension industry regulators to encourage a more creative and competitive environment, as it was already doing with a variety of financial instruments.

Giving suggestion, he said, Pension Fund Administrators (PFAs) may, at some point in time, be allowed to initiate certain products relating to infrastructure and economic development as long as they are bank-able, with entry and exit points and meet security and regulatory standards.

The current level of growth of the pension funds vis-a-vis available investable instruments, he said, suggests that shortly, more funds would begin to chase lesser available investment products. This, he added, would create demand and supply - related challenges. As such, he opined that the Investment/ development related ideologies need a revamp.

"Part of the greater challenge facing the country, which cascades down to pensions investment, is the absence of a strong sciences and technology background. This reduces national initiatives and productivity which should create wider circles of growth, development, financing and dynamics of financing. This must be addressed on both long and short term basis," he advised.

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