Why We Should Never Sell Nigeria - by Minister Of Power,Work And Housing (Babatunde Fashola)

KEYNOTE SPEECH AT THE NIGERIAN PENSION INDUSTRY STRATEGY IMPLEMENTATION ROADMAP RETREAT ON JANUARY 21-23, 2016
We are gathered at a historic time to discuss an important matter.
Some may see a Pension Conference, but I see more.
I see a future for Africa, led by Nigeria, using the resources of the people to build a future that includes the people.
It is not a vision or an idea. It has gone beyond that. It is a journey, one that started a while ago when the Pension Reform Act was signed into Law.
That journey started with the coming together of some Nigerian minds. Minds like that of President Olusegun Obasanjo and Mr Fola Adeola. It has been nurtured by the dedicated hands of men and women who have served in the pension commission who are represented by the current Director- General Mrs Chinelo Amazu- Anohu. It has reached a major milestone from where it must reinvigorate itself .
The tools for that reinvigoration have been provided by our legislators in the Amendment they passed into in 2014. The success of this phase of the journey now rests with you and I. And this is why we gather.
In the letter of the Pension Commission inviting me to be a Keynote Speaker at this event, no topic was assigned.
However, some paragraphs of the letter which I have excerpted provide some directions as to the thinking of the organizers and I will share them with you:
(a)"Two of the most strategic themes, positive that returns (on investment) and visible (measurable) impact on the economy"
(b)"creating solutions to the binding constraints that Nigeria faces in developing "bankable projects" in infrastructure and real estate that pension funds can invest in…"
(c)"While the pool of Pension Funds are a veritable source of capital, lack of suitable investable vehicles with low risk profiles and sufficient comfort continues to hamper the drive to make visible economic impact"
It seems to me that the key words such as "positive real returns", "visible impact on the economy", "bankable products…that pension funds can invest in", "low risk profile and sufficient comfort" makes it easy to create my own topic "Overcoming the Challenges and Managing the Risks and Constraints that Inhibit the Investment of Private Capital and Funds in Nigeria's Infrastructure Landscape in Order to Make a Visible Economic Impact".
In seeking to address this topic, which I hope accords with the objective of the organizers, I will attempt to be empirical by a case study discussion where I will review some of the public infrastructure that have been funded by private capital, and I will do some comparisons of what the Pension Funds are achieving in other economies.
In this way, I hope to highlight the differences between us and those economies, and in that way, make my recommendations about what we should be doing.
The History of Pension Funds in Nigeria
It is impossible in this kind of forum to exhaustively deal with the issue of Pension Funds and its management in the Nigerian public service.
What is appropriate is to highlight the largely unsuccessful initiatives that have been characterized by such brand names as the National Provident Fund (NPF) and the National Social Insurance Trust Fund (NSITF).
Those brands represent the era when pension was only the responsibility of the employer,
What simply happened was that from a failure of governance, coupled with lack of funds as a result of planning deficiency, and sometimes incompetence, pensioners faced a life of uncertainty after a lifetime of service and at a time when they had become frail, unable to work or earn income and often then left disappointed by a system that had taken all they had to give.
It is sad a story that is written on so many faces characterized by many living and dead people whose lives tell the story of anguish.
It is a chapter of Nigeria's story that is perhaps best forgotten, but regrettably they cannot yet be consigned to history because there are still debts to be paid, there are still beneficiaries who are owed, there are still Nigerians, who gave a lot, almost everything under a defined benefit scheme that is yet to give them benefit.
The current pension regime, whose managers are the organizers of this event happily have a better story to tell. It is a story of mutual contribution, where the employee and the employer share the responsibility of planning for the tomorrow.
It is a story different from the past, where the funds are safe and have exceeded N5 Trillion.
It is a story of better management.
It is the starting point for this discussion because there is a hard lesson here.
If people put their money into what they believe in, it is likely to serve them better.
The old scheme where there was no contribution by the employee perhaps reduced their role as stakeholders but does not justify the mismanagement.
But the real story is about contribution, paying your share; and it takes me to the next point which is diversification and the relevance of diversification to our subject.
Diversification
For over 3 (Three) decades we have mouthed the need to diversify our economy in order to open up more sectors for productive activities, income, economic growth and jobs.
But we failed to follow through because of oil resources. It was quick and bountiful income even though there were boom and burst cycles.
Every time the cycle burst, we scampered, and promised to diversify, we take tentative steps, we feel pain. We do not endure, and it is easy to escape because not too far on the horizon is a boom in oil prices and we go back to an old life.
Remember 1970s up to 1976; remember the early 1980s and the burst. Remember the late eighties and Gulf War boom, remember the 1990s and the drop, remember the period of 2009-2014 when oil sold for over $100 per barrel for almost 5 years.
What did we do? We went on a spending spree. Politicians promised everything free.
Everyone got a wage increase, sometimes up to 80% (minimum wage from N7,500 – N10,000 raised to N18,000.00). Did our income as a Nation increased by 80%?
As we sought after free health, free education, free fuel, free housing and free everything, we refused to confront the reality that life is not free