States Are Not Remitting Staff’s Contributory Pnesions
All state governments’ retirees in the country suffer either outright non-payment or long waits to access their pension benefits under the Contributory Pension Scheme.
Industry watchers have blamed this ugly trend on lack of political will by state governments to ensure a functional pension scheme in their states.
Retirees of states that have complied usually wait for between two and six years before they get paid, a source at PenCom said.
Status of implementation of the CPS in states as of June 30 showed that only four states and the Federal Capital Territory Administration had high level of compliance according to the National Pension Commission.
The commission listed theses five states that were funding the accrued rights of their workers regularly and commenced payment of pensions as Lagos, Kaduna, FCT, Osun and Delta.
Despite their higher level of compliance, these four states and the FCT still delayed in commencing pension payments to their retirees.
Lagos State, for instance, that received the National Pension Commission’s award on compliance has not started paying retirees that retired in 2018, 2019 and 2020.
The complying states blamed the delay in payment to backlog of arrears that needed to be cleared.
Anambra was funding the accrued rights of Local Government workers but not paying pensions under the CPS according to PenCom’s compliance list.
Five states with other pension schemes apart from the CPS are Jigawa, Kano, Yobe, Gombe and Zamfara.
The states at bill stage of joining the CPS are listed as Kwara, Plateau, Cross River, Borno, Akwa Ibom, Bauchi and Katsina.
The second quarter 2020 report of PenCom stated that 25 states had enacted pension laws on the Contributory Pension Scheme while seven states were at the bill stage.
Out of the five states operating other pension schemes, four states had adopted the Contributory Defined Benefits Scheme while one operates the Defined Benefits Scheme.
Among the states that had enacted laws on CPS was Niger State which suspended the implementation of the CPS in April, 2015.
However, the state governor recently approved the resumption of the scheme with effect from June 2020.
Among the states that adopted CDBS, Jigawa State was the only state that was fully implementing the scheme by consistently remitting employee pension contributions to selected PFAs to manage and had conducted actuarial valuation to ascertain any shortfall in the fund.
Kano State was yet to transfer its pension funds to licensed operators, and had huge arrears of pension liabilities as of the end of the review period.
Zamfara and Gombe States were yet to commence implementation of the CDBS as of the end of the quarter.
The Chairman, Trade Union Congress, Ogun State, Olubumi Fajobi, decried the backlog of arrears of pension and long waits suffered by retirees under the CPS.
He said, “Take Ogun State for example; we have a very large backlog running to almost N40bn that has not been remitted and that is for about 107 months.
“However, the government is taking steps to redress this.”
He worried that the governments were not committed in terms of remitting the contributions of workers.
Fajobi said, “The waiting period is also of concern for those who are accessing it. We have people waiting for two, three years before they can access any fund from the CPS after retirement.
“This makes a whole nonsense of the scheme from the 2004 reform and also for 2014 laws.”
The President, Association of Senior Civil Servants of Nigeria, Bola Audu, said any state that was not ready for the CPS should not start it, and those who started should endeavour to run it properly and not frustrate retirees.
“Pension is something somebody has worked all his life for and he intends to earn it when he is no longer able to work. So when you now play politics with those who are in pension, I don’t think it is a good idea at all,” he said.
A former President, TUC, Peter Esele, who described the pension situation as unfortunate said it encouraged corruption because those in active service were seeing the sufferings of retirees, and would want to amass as much funds as possible before they retired.
The Director, Centre for Pension Rights Advocacy, Ivor Takor, said the Pension Reform Act in 2004 created a lacuna.
What became obvious was that employees of states and local governments were not covered by or were excluded from the coverage of the Pension Reform Act 2004, he said.
Takor said, “The exclusion was not an oversight by the committee that carried out the reform, neither were sates and local government employees not covered in the executive bill that was sent to the National Assembly.
“Employees of states and local governments were covered in the executive bill sent by the President to the National Assembly.
“On the bill reaching the National Assembly, governors mobilised representatives of their states in both chambers of the National Assembly to remove employees of states and local governments from the bill before it was passed into law.
“Their reason was that the country was under civil rule; therefore, there must be the practice of true federalism, which does not allow the National Assembly to make laws for the states on an issue such as pension, which does not fall in the exclusive legislative list of the constitution.”
Takor said the mischief that found its way into the PRA 2004 was cured in the PRA 2014, which made the provisions of the Act to apply to any employment in public service of the Federation, Federal Capital Territory, states, local governments and the private sector.
Chairman, Federal Concerned Pensioners, David Adodo, lamented the treatment of senior citizens, who were denied their pension benefits.
The Allianz Global Pension Report 2020 recently ranked Nigeria 64th place, especially because of the insufficient adequacy of its pension system.
However, the acting Director-General, PenCom, Aisha Dahir-Umar, said the commission had continued to engage the state governments on compliance through interactive sessions, training and workshops.
COVID-19: CBN Has Disbursed N83B Loans to Healthcare Sector
The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, yesterday, said the central bank had disbursed over N83.9 billion to pharmaceutical and healthcare practitioners in the country since the outbreak of the COVID-19 pandemic in the country.
Also, Lagos State Governor, Mr. Babajide Sanwo-Olu, has stressed the need for a slash in the cost of governance in the country, saying a lot more resources could be dedicated towards healthcare and critical infrastructure.
They both said this yesterday, at the premiere of ‘Unmasked’, a documentary on Nigeria’s response to the pandemic held in Lagos.
Emefiele, who was represented by the CBN’s Director of Corporate Communications, Osita Nwasinobi, explained: “Building a robust healthcare infrastructure was also vital from a security perspective, as some nations had imposed restrictions on the exports of vital medical drugs as well as the use of drug patents that could aid in containing the spread of the pandemic.
“As a result, we focused our interventions in the healthcare sector on three areas. Building the capacity of our healthcare institutions supporting the domestic manufacturing of drugs by businesses, and providing grants to researchers in the medical field, in order to encourage them to develop breakthrough innovations that would address health challenges faced by Nigerians.
“In this regard, we disbursed over N83.9 billion in loans to pharmaceutical companies and healthcare practitioners, which is supporting 26 pharmaceutical and 56 medical projects across the country. We were also able to mobilise key stakeholders in the Nigerian economy through the CACOVID alliance, which led to the provision of over N25 billion in relief materials to affected households, and the set-up of 39 isolation centres across the country. These measures helped to expand and strengthen the capacity of our healthcare institutions to respond to the COVID-19 pandemic.”
According to the CBN Governor, the banking sector regulator also initiated the Healthcare Sector Research and Development Intervention Grant Scheme, which was to aid research on solutions that could address diseases such as COVID-19, and other communicable/non-communicable diseases.
He said so far, five major healthcare-related research projects were being financed under the initiative.
Speaking further on the call to increase access to health insurance, Emefiele said: “One key aspect which we would have to address is improving access to healthcare for all Nigerians. A key factor that has impeded access to healthcare for Nigerians is the prevailing cost of healthcare services.
“According to a study by World Health Organisation (WHO), only four percent of Nigerians have access to health insurance. Besides food, healthcare expenses are a significant component of average Nigeria’s personal expenditure.
“Out of pocket expenses on healthcare amount to close to 76 percent of total healthcare expenditure. At such levels of health spending, individuals particularly those in rural communities may be denied access to healthcare services.
“Expanding the insurance net to capture the pool of Nigerians not covered by existing health insurance schemes, could help to reduce the high out of pocket expenses on healthcare services by Nigerians. It will also help to increase the pool of funds that could be invested in building our healthcare infrastructure and in improving the existing welfare package of our healthcare workers.”
“The private sector has a significant role to play in this regard given the decline in government revenues as occasioned by the drop in commodity prices. Leveraging innovative solutions that can provide insurance services at relatively cheap prices could significantly help to improve access to healthcare for a large proportion of Nigerians particularly those in our rural communities.”
According to Emefiele, the CBN remains committed to working with all stakeholders in improving access to finance and credit that would support the development of viable healthcare infrastructure in our country.
On his part, Sanwo-Olu said: “What are the lessons that we have learned with the Covid-19? Looking at all the things that Covid-19 has cost us, how are we preparing ourselves?
“The truth be told the structure of our governance system needs to change particularly the cost of governance. We need to speak up and ask ourselves are we ready to change.”
“When it gets to the election it is the same set of people that will come up and people don’t come out to vote and we end up having 20 percent out of 100 percent that will elect those that will govern. So, the change has to be about all of us. That is how the real change that will help us will come,” he added.
Emefiele Says CBN Will Resist All Attempts to Continue Maize Importation
The Central Bank of Nigeria (CBN) has vowed to resist all attempts to continue the importation of maize into the country.
Godwin Emefiele, the governor, CBN, in a statement titled ‘Emefiele woos youths to embrace agriculture’, said: “the CBN would resist attempts by those who seek to continually import maize into the country.”
Emefiele, who spoke in Katsina during the unveiling of the first maize pyramid and inauguration of the 2021 maize wet season farming under the CBN-Maize Association of Nigeria Anchor Borrowers’ Programme, said maize farmers in the country had what it takes to meet the maize demand gap of over 4.5 million metric tonnes in the country.
“With over 50,000 bags of maize available on this ground, and others aggregated across the country, maize farmers are sending a resounding message that we can grow enough maize to meet the country’s demand,” Emefiele said.
He explained that the maize unveiled at the ceremony would be sold to reputable feed processors.
He added that this would in turn impact positively on current poultry feed prices, as over 60 per cent of maize produced in the country were used for producing poultry feed.
Nigeria’s Spending Structure Unsustainable, Budget Head Says
Nigeria’s current trend of spending more money on running the government than on building new infrastructure is unsustainable, the country’s top budget oversight official said.
Low revenue collection and high recurrent costs have resulted in actual capital expenditure below two trillion naira ($4.88 billion) a year for a decade, Ben Akabueze, director-general of the Budget Office, said Tuesday in a virtual presentation.
“Hence, the investments required to bridge the infrastructure gap are way beyond the means available to the government,” Akabueze said. Recurrent spending, allocated towards salaries and running costs, has accounted for more than 75% of the public budget every year since 2011, he said.
Africa’s largest economy requires at least $3 trillion of spending over the next 30 years to close its infrastructure gap, Moody’s Investors Service said in November. The country’s tax revenue as a proportion of gross domestic product is one of the lowest globally, according to the International Monetary Fund.
“Huge recurrent expenditure has constrained the provision of good roads, steady power supply, health care services, quality education and quality shelter,” Akabueze said.
Nigeria should amend its constitution to create six regions to replace the existing 36 states, which each have their own governments, Akabueze said. The country also needs to reduce the number of cabinet ministers to a maximum of 24 from more than 40 and cut federal ministries to fewer than 20 from the current 27, he said.
“No country can develop where a large part of its earnings is spent on administrative structures rather than on capital investment,” Akabueze said.
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