From Juliana Taiwo-Obalonye, Abuja
The Federal Government has unveiled a strategic initiative to harness the substantial N20 trillion pension fund and other locally available resources for infrastructure development in Nigeria.
The move is part of efforts to bridge Nigeria’s estimated 20 million housing deficits and to provide massive housing and mortgage loan at 12% interest rates, with 25 years repayment plans.
Minister of Finance and Coordinating Minister for the Economy, Wale Edun, made this disclosure at the end of the Federal Executive Council meeting chaired by President Bola Tinubu.
He said the government’s focus on tapping into domestic financial resources, particularly pension and life insurance funds, was leveraging local funds for national growth and that it was a significant step towards driving economic progress and addressing critical infrastructure needs.
According to him, with over N20 trillion in available funds within the country, there is a clear opportunity to channel these resources into vital sectors such as housing and long-term mortgage provision.
Edun emphasised the resilience of Nigerians and the wealth of long-term funds within the pension and investment industry.
He said by collaborating with the private sector, the government aims to initiate projects that will fuel economic growth, create employment opportunities, and enhance access to affordable housing through extended mortgage options.
“Nigeria is resilient, Nigerians are resilient. And the fact is that even before we start looking to foreign investors, we start looking to foreign funding, there is available in Nigeria, long term funds to fund infrastructure projects, and it’s within the pension, the life insurance and investment fund industry generally.
“There is upwards of N20 trillion available, and much of it is in short term funding that doesn’t need to be. Pension money is long term.
“People save over their lifetime for their pension. And so in conversation, in consultation, collaboration and cooperation with the private sector, we are now able to announce and with the full knowledge and support of all parties, that there will be an initiative to fund growth through investment in infrastructure, including housing, provision of mortgages, long term mortgages, 25 year mortgages at relatively low interest rates.
“Initially, of course, the government will stand back and provide some support, particularly in this era of high interest rates but eventually as interest rates come down, there should be less role for the government through providing, for example, guarantees and so forth.
“So, we can look forward to these huge funds being leveraged with the expertise, the ability, the capacity of the private sector, partnering with the government to drive economic growth.
“On the supply side, construction of houses will be funded. On the demand side mortgages will be made available so that those constructing houses have an outlet and Nigerians who are saving so much by way of pension funds, have the added bonus of access to affordable mortgages.
“That really is the long and short of this initiative and you also as much as anybody else can understand and see what it means in the construction industry to do for the country.
“That is the plan, that is the target, that is the hope. And in this particular case, you have the best and the brightest that Nigeria has to offer, putting their minds together and committing to achieve their goals.”
Edun spoke against the backdrop of what he said in the context of the President Bola Tinubu macroeconomic reforms,“are necessary and could not be delayed a moment longer.”
The minister noted that the reforms are still and are beginning to yield the desired results.
“They were already delayed. Those reforms which are still in process, and which are beginning to give benefits in various areas, particularly in terms of trying to stabilize the economy, the exchange rate, bring inflation down, and eventually get interest rates down.
“But on the other hand, Mr. President has been consistent and he has also been commended, I must say, both around the world for the fact that he is committed to intervening on behalf of the poor and the vulnerable in order to ease the pains of this necessary reform. But at the same time, given where we are in terms of stabilization, it is time to focus on economic growth.
“And one of the key drivers of economic growth is investment in infrastructure, in housing, power, rail, roads, water transport, even technology. These are key drivers of economic growth. They increase product. When you invest in them, you get increased productivity, you get economic growth, and you get job creation, which reduces poverty, and that is the strategy.
“So, it’s two pronged and we’re not pivoting towards this all important growth and you say where were the resources come from?”
Edun also announced that about 600 CNG powered buses and about 30,000 conversion kits will soon be made available to aid reduction of transportation cost.
He disclosed that President Tinubu approved the purchase of CNG powered vehicles for the Nigeria Custom Service (NCS).