The federal government of Nigeria has announced a strategic initiative to utilize the N20 trillion pension fund and other domestic resources for infrastructure development across the country.
This was revealed by Wale Edun, the coordinating minister for the economy and minister of finance, following a federal executive council (FEC) meeting chaired by President Bola Tinubu.
Edun highlighted the government’s strategy to tap into domestic financial resources, specifically pension and life insurance funds, to foster national growth.
He emphasized that with over N20 trillion in available domestic funds, there is a significant opportunity to invest in critical sectors like housing and long-term mortgage provision.
The minister outlined the government’s plan to address Nigeria’s estimated 20 million housing deficit by offering extensive housing and mortgage loans at a 12 percent interest rate with a 25-year repayment plan.
He noted that before seeking foreign investments or funding, Nigeria has substantial long-term funds available within its pension, life insurance, and investment fund industries. Much of these funds, currently in short-term investments, could be redirected to long-term infrastructure projects.
Edun explained that the initiative involves collaboration with the private sector, ensuring that the funds are leveraged effectively to drive economic growth.
The government will initially provide support, particularly in the current high-interest rate environment, but aims to reduce its involvement as interest rates stabilize.
The plan includes funding the construction of houses and providing affordable long-term mortgages, thereby benefiting both the construction industry and Nigerian citizens saving through pension funds. This approach is expected to stimulate economic growth, enhance productivity, create jobs, and reduce poverty.
President Tinubu’s macroeconomic reforms, according to Edun, are essential and timely. These reforms, aimed at stabilizing the economy, exchange rates, and inflation, are beginning to show positive results.
Despite the challenges, the president remains committed to supporting the poor and vulnerable, mitigating the impact of necessary reforms.
In addition to housing, the government plans to invest in various infrastructure sectors such as power, rail, roads, water transport, and technology, which are critical for economic growth and productivity.
Furthermore, President Tinubu has approved the acquisition of compressed natural gas (CNG) powered vehicles for the Nigeria Customs Service (NCS).
The government will soon provide around 600 CNG-powered buses and 30,000 conversion kits to help reduce transportation costs.
