Governor Adams Oshiomhole of Edo State Thursday denied accusing Nigerian Pension Commission (PENCOM) of diverting N3.5 trillion pension fund.
The governor who made the denial in a press statement he signed, in which he clarified his position on the Pension fund, said he never accused PENCOM of diverting the money because he has nothing to do directly with pension money in the first place.
He said, rather, his position is about how pension funds operators invest hard-earned workers’ money in FGN Bonds and Treasury Bills, which in turn was grossly mismanaged through funding consumption.
The text of the press statement reads as follows:
“Recently, a section of news media attributed comments to me regarding the way and manner in which pension funds to the tune of 3.5 trillion Naira were drawn down to support recurrent expenditure and not infrastructure development. In the said reports, the impression created was that I had accused the National Pension Commission (PENCOM) of colluding with the Federal Ministry of Finance to divert the said amount.
“Considering the manner in which this serious economic issue that borders on the future of the Nigerian economy and the welfare of the Nigerian workers who make contributions to the pension funds, is being misrepresented and trivialized in the media, I wish to make some clarifications and set the record straight.
“As someone involved from the outset in the crafting of the PENCOM Act, I am very much aware that under the law, PENCOM is a regulator of the financial institutions and operators that deal directly with the management of the pension funds and pension assets, namely: the pension funds administrators (PFAs) and the pension funds custodians (PFCs). I could not have said therefore that PENCOM diverted pension money because it has nothing to do directly with pension money in the first place.
“Indeed, I recall that when the pension reforms, which led to the creation of PENCOM were being formulated, the selling point of the contributory pension scheme was that pension funds should be source of cheap and long-term funds that would be used to support programmes and investments that will enhance workers welfare such as workers’ housing and the creation of a robust mortgage system.
“However, what turned out in the management and operations of the pension funds was a completely different ball game. It is open knowledge that the PFAs are among the major subscribers of Federal Government of Nigeria (FGN) Bonds and Treasury Bills, which are instruments of FGN’s domestic borrowing, issued periodically by the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN) respectively in behalf of the Federal Government. FGN Bonds as debt securities are generally considered safest relative to other debt instruments in the capital market because they are governed by the “faith and credit” principle; offer attractive rates and guaranteed returns, at least in theory.
“It is, therefore, not a new revelation that total subscriptions of pension funds to the FGN Bonds are in excess of 3.5 trillion Naira or about 70% of the total funds (estimated at 5.1 trillion Naira) so far accrued under the contributory pension scheme. It is also not a secret that in the last five years under the previous administration, the Federal Government had engaged in monthly bond issuances as a means of raising finance to fund recurrent expenditure and service domestic debts, rather than finance capital projects, which was the main purpose of bond issuance if domestic borrowing was to be a productive and beneficial activity to the national economy. These are facts that could easily be verified from the PFAs and PFCs; DMO, Securities and Exchange Commission, as well as CBN, if journalists and the media they represented have gone the extra mile to find out.
“The issue clearly was not about PENCOM diverting pension funds. It was about how pension funds operators invest hard-earned workers’ money in FGN Bonds and Treasury Bills, which in turn was grossly mismanaged through funding consumption (recurrent expenditure, payment of salaries for federal employees, financing budget deficits and domestic debt servicing) rather than concrete investment in critical infrastructure, housing, etc. Pensions as workers savings, rather than being invested in capital projects with multiplier effects on jobs and incomes, are being invested in bonds which go into funding wasteful recurrent spending. Spending borrowed money on unproductive ventures typically generates inflationary pressures that lead to devaluation of the currency and purchasing power of workers. The net effect is that by the time these savings are required to pay pensioners in the future their real value would have been eroded quite significantly. As we have seen even in advanced economies, such kind of mismanagement of pension funds had easily sparked economic crisis that undermined the welfare of workers and retirees.
“I have followed the recent World Pensions Summit organized by PENCOM and all through experts and analysts kept emphasizing that pension funds should be invested in infrastructure like roads, power and other productive ventures to develop the national economy. The point here is that pension funds should not be invested in instruments that mobilize funds only for unproductive and wasteful ventures.
“It is in the public domain that federal budgets in the last four years have devoted as much as 85% of the budgetary outlay to recurrent expenditures including salaries. The National Assembly on whose onus rests the approval of the budget has been lamenting year-in-year-out, this clearly bad economics, a situation in which only a paltry 15% of the budgetary outlay was devoted to capital projects and investment in the last five years. Federal legislators have also openly complained about the fact that even the 15% capital expenditure is hardly executed fully, implying that the amount devoted to recurrent expenditure will be even much higher than the 85% reported officially.
“Based on the foregoing, let me reiterate that nothing I have said about pension funds and how they have been managed in the last five years is new. Everything I have said is in the public domain and can be verified. It behooves the media and journalists to refrain from twisting and misrepresenting critical national issues such as this one, so that they will not give individuals or institutions that mismanage the national economy an escape route to divert attention or muddle-up the issues. This is a responsibility we all owe Nigeria and the future generations."

Source : I did not accuse PENCOM of diverting N3.5trn - Oshiomhole | P.M. NEWS Nigeria http:///L6oNKVqd3V7

Oshiomole fast becoming a political nuisance.

Hmmmm

I guess oshiomole was high on skunk when he came up with allegations right Yeye dey smell...

Pls by any chance do that immunity given to dem governors also allows dem to smoke cheap weed?

Edo pple dey try oo..to dry cope with dis man oo.....Lara!!!!!! What have u done to Osho oooo

Mr Mouth Diarrhoea
Basket mouth wan open mouth again, basket mouth wan talk again o *in Fela's voice*

Oshiomhole, go and ........... Keep kwayet.

very soon journalist would avoid this man as he is becoming a nuisance to the country.

This man Oshiomhole's stupidity degree is getting higher everyday.

Una sure say Osomole dey sleep well for house?
Abi that him babe dey always take ham do marathon for bed? Cause this guy now talks as him mouth na my babe pucci, #AlwaysPissing!!!!

Nonsense, person wey dey suffer from diarrhoea dey know when e dey shit?? This guy is finished. Next!

Oshiomole is right.

fitzmayowa:
I guess oshiomole was high on skunk when he came up with allegations right Yeye dey smell...

Dahveydson:
Oshiomole fast becoming a political nuisance.

Some of una brain sef.... Did you read oshiomoles first statement which was reported wrongly?.... now he has been forced to come and clarify that he never made the statement which the pencom people were responding to ystrday and you are here shouting nuisance?... Anyway, this is what happens when u just hate someone. It is allowed

A lot of mumus here... even after clarification, people are already still just want to give negative comments... Losers!

Oshiomole don't forget your days in NLC .....what happened to NSITF?

obailala:
Some of una brain sef... do you type b4 you read?... cant you see he did not make the allegation?

He did not make the allegation and yet he was quoted as making the allegation, why didn't the media quote ambode of making such allegation or even PMB Don't let your sycophancy blind you to the truth...

fitzmayowa:



He did not make the allegation and yet he was quoted as making the allegation, why didn't the media quote ambode of making such allegation or even PMB Don't let your sycophancy blind you to the truth...

I am sure you are an educated person.... kindly go and read the original statement and then later go and read the way newspapers reported twisted it and then finally come back and read this clarification.

I understand you hate the man for obvious reasons, but this particular issue (not the other issues) is a very clear and elementary case of reporters being sensational/unprofessional and reporting bullcrap in order to sell papers.

When you cornered, You look for alternative routes!

Osho well done oo!