Pension Fund Operators Association of Nigeria (PenOp) has blamed the failure to invest money borrowed from pension funds on past governments.

The group said the funds stand at over N5.3 trillion.

Its Chairman, Longe Eguarekhide, who spoke at the PenOp2016 Media Retreat for Pension correspondents, in Lagos, said instead of channelling these borrowings into infrastructure, it had been using it to fund its recurrent expenditure.

PenOp is the umbrella body of Pension Funds Administrators (PFAs) and Pension Fund Custodians (PFCs).

Eguarekhide, who is also the Managing Director, AIICO Pension, said people who say pension fund does not have any impact on the economy are wrong, adding that the government has been borrowing about 70 per cent of the funds as allowed by the Pension Reform Act (PRA) 2004 as repealed by the PRA 2014

He said: “It is a mistake for people to say they don’t see investment that are made from pension fund impacting on the economy. This cannot be blamed on the pension industry but on government. If you look back at how the pension money has been invested, you will find out that over 70 per cent of the money are in government bonds. In other countries, some government invested the money in infrastructure to impact on their local economy. Lagos State is a good case in point.

“As pension managers, we are not responsible for what government does with money that it borrows. Ideally, monies borrowed for reasonably long term should be used for long term assets and not used to fund recurrent expenditure. It ought to have been used to develop infrastructure because that would have had significant impact on the economy.”

Eguarekhide said the critical question that Nigerians needed to ask is: What has the government done with all the money it has made from all the borrowings from institutional investors?

“For instance, if they borrow $2 billion and they take it and utilise it as bail out money, how do you think the creditors will feel? All these questions are very important for people to ask and not look at pension managers as not wanting the fund to be used to impact the economy,” he added.