Although reforms the Pension Reform Act 2004 held high promises as the panacea for the Augean stable of wanton corruption, sharp practices, senseless looting, the life sentence for the aged that was the old pension system, it has taken some years of steady success for Nigerians to truly reckon with the pleasant reality. However, no one would blame them for their cautious optimism at its inception. In a country where policy somersaults, internal sabotage, and circumvention of rules by entrenched cabals are the order; in a country where citizens have seen hopes betrayed and programmes, policies, and laws which appear perfect on paper translate to empty promises and paper tigers, the success story of the Pension Reform, especially the Contributory Pension Scheme (CPS), under the watchful eyes of the National Pension Commission, PENCOM, will rightly qualify as a heartening development.
Probably, the other that compares to it was the transition from a ruling political party (Peoples Democratic Party) government to the All Progressives Congress government. It was never thought possible, given Africa’s peculiar history. The success of the Pension Reform, especially the CPS aspect of it, can be hinged on three main factors, namely, policy consistency, effective regulation, and transparency, which, in itself, is an offshoot of regulation. Unlike most other policies, Pension Reform has witnessed consistency and strengthening. Former President Olusegun Obasanjo underscored this during the Pension Awards on the fringes of the maiden World Pension Summit (Africa Special) at the Aso Rock Villa in 2014.
While also extolling the integrity and competence of those who designed the Reform, including Fola Adeola and the current Director-General of PENCOM, Mrs. Chinelo Anohu-Amazu as well as those who have managed it, Obasanjo confessed that nobody, including himself “could imagine that within a space of 10 years the fund would have built up to USD27 billion of COOL MONEY, NOT HOT MONEY; and we also heard that in the last 10 years, there has not been a single case of fraud”.
The prompt action of PENCOM in the case of the First Guarantee Pensions Limited (FGPL), where there has been infighting among shareholders on allegations of corruption and other unhealthy corporate practices, depicts how speedy and scrupulous PENCOM can be in safeguarding funds and assets in the industry and ensuring strict compliance and sound corporate governance by industry players.
Meanwhile, the regulator agency as set to launch the Micro Pension Scheme to absorb the greater number of Nigerians in the informal sector who are self-employed and have no RSAs. This will no doubt more than doubt the current subscription figure and pension assets.
It is therefore not surprising that there is no single PFA that does not have a buyer seeking to buy up the entire entity or at least a majority/controlling share therein. The industry is also generating a lot of interests from foreign concerns in search of partnerships and investments, especially in the infrastructural development, which in itself, is a can’t-do-without if the nation must diversify its economy at this critical time.
Only recently, the Sustainable Business Initiative (SBI) of the University of Edinburgh, United Kingdom, endorsed PENCOM as “clearly a trailblazer in Africa in terms of transforming a regulatory vision into reality”. These endorsements, the bourgeoning funds, the growing local and foreign interests in the industry, are clear testimonies to performance on the part of PENCOM and the industry in general. It makes me look forward to retirement!
Sule, a Development Economist, wrote in from Abuja.
