The Federal Government of Nigeria has concluded plans to deploy about ₦20 trillion from the pension funds account and other funds to drive economic growth by investing in infrastructure, housing power, rails, roads and technology, Africa Today News, New York reports.
Mr. Wale Edun who is the Finance Minister and Coordinating Minister of the Economy made this disclosure yesterday after the Federal Executive Council (FEC) meeting chaired by President Bola Tinubu.
He said before prospecting and waiting for the deployment of foreign direct investments, the government intended to access local funds, saying, “There is available in Nigeria long term funds to fund infrastructure projects, and it’s within the pension.
“In the life insurance and investment fund industry, generally, there is upward of N20 trillion available as much of it is in short term funding that doesn’t need to be. Pension money is long term and people save over their lifetime for their pension. And so in conversation, in consultation, collaboration and cooperation with the private sector, we are now able to announce and with the full knowledge and support of all parties, that there will be an initiative to fund growth through investment in infrastructure, including housing; provision of mortgages, long term mortgages, 25 years mortgages at relatively low interest rates. Initially, of course, the government will stand back and provide some support, particularly in this area of high interest rates but eventually as interest rates come down, there should be less role for the government through providing, for example, guarantees and so forth.
“So, we can look forward to these huge funds being leveraged with the expertise, the ability, the capacity of the private sector, partnering with government to drive economic growth. On the supply side, construction of houses will be funded. On the demand side, mortgages will be made available so that those constructing houses have an outlet and Nigerians who are saving so much by way of pension funds have the added bonus of access to affordable mortgages.
“That really is the long and short of this initiative and you also, as much as anybody else can, understand and see what it means in the construction industry to do for the country. That is the plan, that is the target; that is the hope. And in this particular case, you have the best and the brightest that Nigeria has to offer, putting their minds together and committing to achieve in this goal”.
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The FEC also approved an initiative aimed at transforming the nation’s infrastructure and housing sector.
The initiative, as approved by the council, is tailored to meet the urgent demand for critical infrastructure and affordable home ownership, fostering job creation, inclusive growth, and long-term productivity enhancement.
The initiative will unlock private-sector funds, which Nigerians can access for 25-year mortgages at low interest rates to realize their dream of owning a home.
At a press conference after the meeting, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, explained the importance of innovative collaborations between the private sector and Sovereign Owned Enterprises (SOEs) like the Nigeria Sovereign Investment Authority (NSIA) and the Ministry of Finance Incorporated (MoFI).
He said such partnerships are envisioned to strategically channel funding to high-impact areas, ensuring impactful economic outcomes for the people.
“This alliance signifies a significant step towards driving sustainable development and economic growth in Nigeria by leveraging private-sector resources and expertise in strategic areas of need,” the minister said.
The initiative aims to further strengthen the Federal Mortgage Bank and the Federal Housing Authority, enabling both public and private entities to fulfill their housing obligations. This collaboration is expected to boost the initial phase of the President’s Renewed Hope Cities project, with the aim of providing 50,000 units of homes across the country.
The partnership includes institutional investors creating mortgages within a framework overseen by the Ministry of Finance Incorporated to enable funding. This structure will streamline fund transfer from private investors to the housing sector, specifically the mortgage market, encouraging affordable home ownership opportunities.
The partnership will incorporate a specialised framework utilising a special-purpose vehicle (SPV) owned by the Nigeria Sovereign Investment Authority. This structure will enable institutional investors to provide sustainable long-term financing with robust oversight, reducing risks associated with large-scale government projects.
The initiative also aims to ensure private-sector involvement in project governance, cost management, and asset delivery, offering tangible benefits to Nigerians while safeguarding investor interests. The infrastructure focus includes power generation, toll roads, and railway projects to align with the government’s economic goals.
Simultaneously, the Federal Government of Nigeria will concentrate on funding essential infrastructure to enhance project viability for private-sector participation.
Private-sector discussions and commitments indicate a potential mobilisation of around N2 trillion in long-term financing for housing and infrastructure projects nationwide. This partnership holds the promise of numerous benefits for the Nigerian population.