The Federal Government has approved the issuance of N758 billion in bonds to clear accumulated pension debts owed under the old Defined Benefit Scheme, preceding the introduction of the Contributory Pension Scheme in 2004.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed this to journalists in Abuja on Tuesday after the 23rd Federal Executive Council (FEC) meeting at the Aso Rock Villa.
He explained that the decision was reached after a comprehensive review of outstanding pension liabilities, and that the Debt Management Office (DMO) would oversee the bond issuance.
The move, he said, was aimed at providing long-overdue relief to affected pensioners whose entitlements had accumulated over the years due to periodic wage increases.
“An equally important issue of social interventions is pensions. There was approval for the government, through the Debt Management Office, to raise a Federal Government Bond of about N758bn,” Edun stated.
“That is to clear up the backlog of pension liabilities owed various categories of pensioners who are owed funds under the defined benefit system that preceded the defined contributions, the Contributory Pension Scheme that came into force in 2004 and was updated with a new act in 2014.
“There were some accrued liabilities which were building up over time. So, for example, someone who was on the defined benefit scheme yet to retire would need a top-up of their contributions or the amount due to them every time there was a wage increase, every five years or so. So, this liability built up to a point where it would not be easy to pay them down on an ongoing basis.
“So, to clean up that critical area and to give people their right, which is the payment of their pension liabilities as and when due, the government has put in place an approval for Debt Management Office to raise N758bn that will pay down all these liabilities and of course, be a tremendous relief to the beneficiaries.”
The Minister further explained that clearing these pension obligations aligns with ongoing economic reforms, ensuring that retired government workers receive their entitlements without further delays.
The Federal Government’s approach, according to Edun, is focused on long-term fiscal stability while ensuring social security for pensioners who have waited years for their payments.
The council also approved a €30 million (N46.30 billion) concessional loan from the French Development Agency to support the development of clean-energy student housing across tertiary institutions in Nigeria.
“We had a €30m long-term concessional financing by a French Development Agency, which is supporting student housing in conjunction with Family Homes Fund Limited as the partner and implementer.
“It is for student tertiary accommodation at project sites throughout the country to provide sustainable and clean energy-based accommodation for students; we all know what an important intervention that is for the educational sector and students, given the shortage,” Edun explained.
The Federal Executive Council also approved the National Single Window Project, an initiative aimed at enhancing trade efficiency and competitiveness in Nigeria’s export processes. The Minister emphasized that the project would boost government revenue and Nigeria’s global competitiveness, particularly under the African Continental Free Trade Agreement (AfCFTA).
“It also speaks to increasing government revenue. So it’s both on the fiscal side; it is both revenues earned in terms of foreign exchange and government revenue,” he added.
The project’s technology providers and hardware suppliers have been approved, with the hardware components expected to be delivered within 12 months, while the full implementation of software and e-government systems will take 24 months.
Edun also highlighted the importance of fiscal reforms in driving Nigeria’s economic agenda, ensuring that revenues generated are reinvested into key sectors to sustain economic growth and reduce poverty.
