Our pension not meant for infrastructure, TUC warns

The Trade Union Congress of Nigeria (TUC) on Sunday condemned the recent comments by some National Assembly members that the accumulated pension funds should be deployed for infrastructure development.

TUC President, Comrade Bobboi Bala Kaigama

The congress in a statement by the President, and Acting Secretary General of TUC, Comrade Bobboi Bala Kaigama and Comrade Simeso Amachree, said that the pension scheme was informed by the need to assuage the poverty of and difficulties faced by retirees and that the scheme is not to raise money for provision of any infrastructure nor investment at the instance of the rich.

Recall that a motion was sponsored by a member of the Nigerian House of Representatives representing Kabba Federal Constituency, Hon. Tajudeen Yusuf, who lamented that the growing decay in infrastructure across Nigeria needs an urgent attention.

The House however agreed that the consequences of taking foreign loans and facilities to address infrastructure demands would, in the long run, have a damaging impact on the economy.

The statement reads: “Congress has repeatedly made its position on this vexing issue very clear: the pension scheme was informed by the need to assuage the poverty of and difficulties faced by retirees and not to raise money for provision of any infrastructure nor investment at the instance of the rich.

“We also use this opportunity to reiterate that the 25 percent of total contribution paid at first instance to workers on retirement is too small. Anything less than 50 percent defeats the purpose of the scheme. As it stands today many states claim inability to pay the national minimum wage of N18,000, a sum that is itself barely enough to take the worker home talk less of paying the bills for his family’s shelter, upkeep and development.

“Infrastructural development remains the duty of the government. It is a key driver and a critical enabler of sustainable growth all over the world, as it provides a unique avenue for the public and private sectors of the economy to thrive. It is also critical in attracting foreign investors.

“Nevertheless, rather than appropriating the monies saved from workers’ contributions to perform the government’s responsibility to fix roads, electricity and other social infrastructure, we recommend that the funds be utilised in projects that are of direct benefit to the retirees and other workers, such as fixing the chronic housing deficit. And this must be done with rules for proper accountability well in place.

“Housing deficit is a major problem facing Nigeria. Many people live on the streets while most workers cannot afford a decent home. Some workers resort to borrowing from banks to build their homes, and that at forbidden interest rates as most of them end up losing the houses to the banks because of inability to repay the loans and accumulated interests.

“While we appreciate the effort of mortgage institutions and developers, we have also observed that their houses are unduly expensive. There should be rules that allow workers to borrow from their retirement savings at friendly interest rates to build houses, using accumulated savings as collateral. Thus a contributor who has N5 million in his Retirement Savings Account (RSA), for example, should be at liberty to borrow as much as N3m million from it at single digit interest rate. This makes a lot more sense than the present scenario where the same contributor may find himself having to approach a bank to borrow the N3 million at 30 per cent interest rate to build a house. Equally appalling is a situation where a contributor pays about N8 million to mortgage institutions for a house worth N5 million.

“The Congress recognises the daunting task before the Buhari administration consequent upon the total rape of the economy by some unscrupulous characters whose stock in trade is to launder and stockpile money in sewage pits.

“We also applaud the war on corruption, and it is our view that the infrastructural needs of the country would be more appropriately met with recovered monies from the war and from traditional sources of development funds than with pension funds sourced from the sweat of toiling, underpaid Nigerian workers.”