HomeSocietyFormer Edo Governor Urges Labour to Demand Better Use of Pension Fund

Former Edo Governor Urges Labour to Demand Better Use of Pension Fund

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Nigeria is facing a severe housing shortage, with millions of people living in slums or on the streets. But there is a huge pool of money that could be used to build affordable homes for workers: the pension fund.

 

The pension fund is made up of contributions from workers and employers and is meant to provide income security for retirees. However, according to Senator Adams Oshiomhole, a former president of the Nigeria Labour Congress (NLC) and ex-governor of Edo State, the fund is being mismanaged and misused by the government and private administrators.

 

Oshiomhole, who played a key role in the pension reform of 2004 that introduced the contributory pension scheme (CPS), said the fund was not serving the social purpose of providing housing for workers. He said the federal and state governments were borrowing from the fund at low-interest rates, while the pension fund administrators (PFAs) were making profits from workers’ savings.

 

He made these remarks at the 8th Quadrennial National Delegates Conference of the Non-Academic Staff Union of Educational and Associated Institutions (NASU) in Abuja, with the theme “Trade Unionism in the Era of Economic Crisis: Addressing the Increasing Poverty Level of Nigerian Workers.”

 

A Social Capital for Workers

 

According to a report by Vanguard, Oshiomhole said the pension fund was a social capital for workers and should be invested in mass housing projects that would benefit them. He stated that workers should not be like mechanics who repair cars for others but have none themselves, or carpenters who make furniture for others but have none in their homes.

 

He said workers should demand that the pension fund be refocused on the social purpose of pension, which is to ensure that by the time they retire, they have a roof over their heads. 

 

He urged NASU to work with the NLC to revisit the management of the pension fund and to challenge the National Pension Commission (PenCom) on how the fund was being used. He said he would support them in any fight on the issue.

 

A Potential Solution for the Housing Crisis

 

Nigeria has an estimated housing deficit of 22 million units, according to the World Bank. The country needs to build at least 700,000 units per year to meet the demand, but only about 100,000 units are built annually, according to the Nigerian Institute of Building.

 

The pension fund, which is over 11 trillion Naira as of September 2023, according to PenCom, could be a potential solution for the housing crisis if properly utilized. The fund could provide long-term finance for housing developers and buyers, and also create a market for affordable and quality housing for workers.

 

The fund could also help to reduce the poverty level of Nigerian workers, which has been worsened by the economic crisis and inflation. According to the National Bureau of Statistics, the poverty rate in Nigeria was 40.1 percent in 2019, meaning that 82.9 million Nigerians were living below the poverty line of 137,430 Naira per year.

 

A Call for Action

 

Oshiomhole’s call for labour to revisit the pension fund’s management is not new. In 2019, the NLC had also urged the government to use the fund for housing and infrastructure development, rather than for recurrent expenditure.

 

However, the call has not been heeded by the authorities, and the fund remains largely under the control of the PFAs and the government. The workers, who are the owners of the fund, have little say or benefit from it.

 

The pension fund is not just money, but a social capital that can solve Nigeria’s housing crisis and improve the welfare of workers. It is time to make it work for the workers.

 

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