Oshiomhole Criticises Governments For Borrowing From N11tr Pension Funds

Oshiomhole Criticises Governments For Borrowing From N11tr Pension Funds

Senator Adams Oshiomhole (Edo North) criticized the wrongful utilization of workers’ contributory pension funds by both governors and the federal government, deeming it unacceptable.

He expressed his disapproval of the government’s preference for utilizing these funds over commercial bank loans due to the lower interest rates.

Oshiomhole argued that this practice constitutes a violation of the concept of the contributory pension scheme, originally established to represent social capital that workers could rely on in their retirement. He highlighted the current estimate of the funds, exceeding N11 trillion, emphasizing that these funds should be invested in mortgages for workers. This, he asserted, would ensure that retirees have housing upon the conclusion of their careers.

The senator lamented that the original purpose of establishing the pension fund has been undermined by administrators. Speaking at the 8th Quadrennial National Delegates Conference of the Non-Academic Staff Union of Educational and Associated Institutions (NASU) in Abuja, the theme of which was “Trade unionism in the era of economic crisis: Addressing the increasing poverty level of Nigerian workers,” Oshiomhole conveyed his concerns.

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The erstwhile Labour leader said: “I know I resisted the idea of contributory pension to be managed by Pension Fund Administrators PFAs. These PFAs are profit seekers, you cannot give me six per cent return on my pension savings and yet path with 25 per cent.

“In misery I am getting poorer but we are the greatest economists you can ever think of. Nowadays, that pension scheme is over N11 trillion deducted from your wages, if they put up a part of that trillion or more into mass housing, will workers remain homeless? No, because we were told that the reason we don’t have a flourishing mortgage system in Nigeria is that banks don’t give long-term funds.

“Governors go to borrow these pension funds at a very reduced interest rate for about six per cent, instead of going to the banks which have higher interest rates. Because the banks say they cannot give out customers’ funds to borrowers, especially because some save at maybe two to three months and come and collect, such funds cannot be used as long-term loans.”

Senator Adams Oshiomhole also denounced the brutalization of Joe Ajaero, the President of the Nigeria Labour Congress (NLC), by thugs. He criticized the resulting two-day strike that disrupted social and economic activities in the country.

Oshiomhole expressed his view that labor leaders often approach the government with biased and inadequately articulated positions, giving government officials the upper hand in negotiations. He stressed the importance of the labor movement presenting a united front, acknowledging that capitalists may attempt to break or fragment their unity.

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Regarding the removal of the petrol subsidy, Oshiomhole advised workers not to dwell on their predicament but to strategize and navigate the challenging situation. He urged workers to unite and assert their demands to those in authority instead of lamenting unfavorable government policies.

In response to the subsidy removal, Makolo Hassan, the President of NASU, asserted that state governments were the primary beneficiaries of the removal, plunging millions of Nigerians into poverty. He called on state governments to emulate the federal government’s wage award to federal employees as an interim measure to alleviate the hardship caused by the subsidy removal.

Hassan said: “In view of the fact that all state government workers are equally affected by the same hardship occasioned by the removal of fuel subsidy, we call on the remaining state governments to, as a matter of urgency, announce and implement their awards.

“State governments have no option than to do so because they are the biggest beneficiaries of fuel subsidy removal in view of the quantum of increase in the allocations they are now receiving from the Federation account.”

Hassan also urged President Bola Tinubu to initiate the processes for reviewing the current national minimum wage Act. He highlighted the struggle of workers to cope with the harsh economy and an excessively high cost of living that no longer aligns with their take-home pay.

Acknowledging the economic crisis in the country, the NASU President lamented that the monetary policies of both the immediate past and current government have led to a 27.3 percent inflation rate, an exchange rate as high as N1,100 to a dollar at the time of the report, and a pump price of petrol soaring to N640 per litre. He argued that these factors are undermining the significance of the existing minimum wage.

He said: “The call for the review of the National Minimum Wage has become urgent in view of the information given by the National Bureau of Statistics (NBS) in its report for October 2023, which stated that the major contributors to the increase in inflation were food and non-alcoholic beverages, housing, water, electricity, gas and other fuel, clothing and footwear, transport, furnishings, household equipment and maintenance. The continued rise in inflation was attributed to removal of petrol subsidy and the devaluation of the official exchange rate

“I therefore call on the president to, as a matter of urgency, constitute a National Minimum Wage Negotiating Committee to review the current National Minimum Wage Act.”

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