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Financial market operators in Nigeria have described the ongoing World Pension Summit, Africa Special, holding in Abuja as an opportunity to address the concerns of the finance industry.
Speaking on the potentials of the pension fund for economic development on Tuesday, the Director General of the Security and Exchange Commission (SEC), Arunma Oteh and an economist, Bismark Rewane, agreed that if States and Federal governments could remain on the same page on the allocation of the pension fund Nigeria would experience remarkable economic growth.
Oteh pointed out that it was absolutely important for all states in Nigeria to key into the Contributory Pension Scheme initiative, emphasising the importance of focusing on the well-being of Nigerians later on in their lives.
"It is important that when people have worked very hard that they also will enjoy a good retirement and part of enjoying a good retirement is saving for when you are not as able to work as hard.
"What is happening at the Federal Government level must happen at the state level and even must happen at the private sector. I believe that what we have seen over the last 10 years can be consolidated," she said.
The Director General of SEC expressed optimism that with the enforcement issues that had been put into the current pension law would result in greater contributions.
Mr Rewane stressed that in a mature or growing economy the importance of involuntary savings was very critical, explaining that a consideration of the relationship between voluntary and involuntary savings in Nigeria showed that the involuntary savings are over four trillion Naira while the voluntary savings are less than one trillion Naira.
He further observed that fact that involuntary savings stay for a longer duration made it the bedrock for investments.
The World pension Forum Started on Monday with participants looking to resolve the challenges Africa is facing in its pension reform.
Nigeria transited from pension deficit of about 2 trillion Naira (about 12.9 billion dollars) in 2004 to accumulate pension assets of over 4.21 trillion Naira (about 27.2 billion dollars) by March 2014.
In his speech at the opening of the two-day summit, President Goodluck Jonathan made it clear that the protection of pension funds’ retirement benefits remains top priority of his administration.
"Pension as globally recognised occupies a strategic place in national socio-economic development. It is not only a vital component of social security but also a veritable vehicle for nation building. Indeed, investment in pension has profound impact on the well-being of pensioners, the society and the economy at large" he said.
Nigeria’s Finance Minister, Dr Ngozi Okonjo-Iweala, said Africa is yet to harness the potentials of the pension scheme in the continent, with a current asset base of funds capable of addressing the continent’s infrastructure challenges.
At the opening of the World Pension Summit, Africa Special on Monday, Dr Okonjo-Iweala called on African countries to switch to the Contributory Pension Scheme currently operational in Nigeria, which she said had immense benefits.
She stressed the need to improve pension fund contribution among the working class in African countries, advising public and private companies to key into the contributory scheme.
"We are happy to have this Africa Pension Summit because the contribution of African pension funds to the growth of Africa’s economies is still rather low. It is a low percentage of the GDP in many countries but it is improving.
"We need to capture a significant proportion of our workforce especially those in the income sector into our pension systems. We need to encourage countries to switch to the contributory pension scheme," she said, stressing that the huge long-term funding gaps in infrastructure development could be addressed with such funds.
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