The Nigerian government has announced plans to mobilise pension funds to finance the construction of 5,000 kilometres of roads.
This plan has raised concerns about transparency and the potential risks of diverting retirees’ savings to build infrastructure projects.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed the initiative during an online chat with select journalists, according to a statement by the ministry’s spokesman, Mohammed Manga.
The minister presented the project as part of a broader strategy to stimulate economic growth through private sector participation and institutional investment.
However, the decision to deploy pension funds—money meant to secure the financial future of retirees—into road construction has sparked concerns about accountability, potential mismanagement, and the absence of clear oversight mechanisms.
Critics point to Nigeria’s notorious track record of poor public financial management, culture of contract inflation, and abandoned infrastructure projects as reasons for heightened scrutiny.
Minister Edun, however, failed to specify the highways earmarked for construction. Without a list of the proposed roads, it remains difficult for citizens, stakeholders, and financial watchdogs to track expenditures and assess progress.
Given past budgetary leakages and misappropriation, transparency advocates argue that such opacity could enable financial mismanagement and even outright theft.
Nigeria’s pension fund, estimated at over ₦17 trillion, serves as a critical safety net for millions of retirees. The National Pension Commission (PenCom) has previously warned about the risks of using pension savings for non-traditional investments.
Experts caution that diverting pension funds to infrastructure without stringent safeguards could jeopardise retirees’ benefits if projects underperform or if funds are misallocated.
The federal government has argued that private sector involvement and institutional investments will mitigate risks, citing global best practices where pension funds have been used for infrastructure development.
However, skepticism remains high in the absence of detailed implementation plans, stakeholder consultations, and legally binding safeguards.
With inflationary pressures mounting and the economic landscape still recovering from fiscal challenges, the move to leverage pension funds for road construction demands greater scrutiny.
Stakeholders said until the government provides comprehensive details on project selection, execution frameworks, and accountability measures, concerns over financial prudence and pensioners’ security will continue to overshadow the initiative.
According to Minister Edun, the economy has pulled back from the brink of a fiscal crisis. Nigeria recorded 3.84% GDP growth in Q4 2024—close to the 3.4% annual target—while inflation began to ease, revenues increased, and the exchange rate showed signs of strengthening.
Edun reported a 20% increase in government revenue last year, alongside a reduced budget deficit and a decline in debt servicing as a percentage of revenue.
He reiterated the government’s commitment to responsible spending, stronger fiscal management, and efforts to raise the tax-to-GDP ratio to 18% over the next 18 months—through improved compliance, digitisation, and broadening the tax base.
The minister disclosed that the next phase of economic growth would be driven by private-sector investment, saying a ₦1 trillion low-interest mortgage fund—backed by both public and private financing—will soon be launched to stimulate the housing sector.
He also said that pension funds and institutional investors are being mobilised to finance 5,000 kilometres of roads under the Highways Management and Development Initiative.
While reaffirming Nigeria’s ongoing efforts to diversify the economy, the Minister noted that oil revenue remains essential, and plans are underway to expand domestic refining capacity to 1.2 million barrels per day as well as ensure a secure, investor-friendly operating environment in the oil sector.
He urged exporters to focus on domestic and regional markets to cushion the impact of global shocks, including recent tariff policies introduced by the United States.
With an average national age of 16.9 and over 600,000 graduates annually, the Minister underscored the urgency of youth-focused economic policy. He cited upcoming funding mechanisms to support young entrepreneurs and highlighted President Tinubu’s recent launch of a national sports empowerment programme in Ogun State.
Edun reaffirmed the government’s commitment to enabling a business-friendly environment and fostering sustainable, inclusive growth for all Nigerians.
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