FEC approves N758 billion bond to settle pension arrears
Joy Agwunobi
The Federal Executive Council (FEC) has approved the issuance of a N758 billion bond to address outstanding pension liabilities for all categories of federal pensioners.
The approval, granted during the second day of the FEC meeting at the State House in Abuja, will enable the Debt Management Office (DMO) to secure the necessary funds to clear pension arrears under the Defined Benefit Scheme. This scheme, which predates the current contributory pension system, was replaced in 2004 and further amended in 2014.
Wale Edun, the minister of finance and coordinating minister of the economy, made the disclosure to the press following the FEC meeting chaired by President Bola Tinubu.
He explained that after reviewing strategies to address outstanding pension liabilities, the Federal Government, through the DMO, will issue bonds valued at N758 billion to settle pension debts accrued under the previous Defined Benefit Scheme. These debts accumulated over time, mainly due to periodic wage increases. Settling these arrears will provide much-needed relief to the affected pensioners.
Edun stated, “Pensions are an important aspect of social welfare. The government has approved the issuance of a Federal Government Bond worth approximately N758 billion. This will help clear the backlog of pension liabilities owed to pensioners under the Defined Benefit Scheme, which was in place before the Contributory Pension Scheme came into effect in 2004 and was updated with a new act in 2014.”
“Over time, certain liabilities built up, particularly as pensioners in the Defined Benefit Scheme were owed additional funds whenever there were wage increases every few years. This created a substantial liability that was challenging to manage on an ongoing basis. To address this issue and ensure pensioners receive their rightful payments on time, the government has secured approval for the DMO to raise N758 billion, which will fully clear these liabilities and provide much-needed relief to pensioners,” he added.
In addition to the pension bond approval, the council also granted a €30 million (approximately N46.3 billion) long-term concessional financing agreement with the French Development Agency. This funding, in partnership with Family Homes Fund Limited as the implementing agency, is intended to support the development of sustainable, clean-energy-based student housing across various tertiary institutions in Nigeria. Edun highlighted the importance of this initiative in addressing the critical shortage of student accommodations nationwide.
He explained, “The €30 million concessional financing from the French Development Agency, in partnership with Family Homes Fund Limited, will fund the construction of sustainable and clean energy-based student housing across the country. This initiative aims to tackle the severe shortage of student accommodations, a pressing issue in our educational sector.”
On economic growth and resilience, Edun disclosed that the Federal Government has approved the National Single Window Project. This initiative aims to boost Nigeria’s competitiveness and streamline the efficiency of the country’s export processes.
The approval allows technology providers and hardware suppliers for the project to begin their work. The hardware portion of the project is expected to be delivered within the next 12 months, while the full implementation, including the software, technology, and e-government components, will take approximately 24 months.
Edun explained that the National Single Window Project would not only enhance government revenues but also improve Nigeria’s global economic standing, particularly in the context of the African Continental Free Trade Agreement (AfCFTA).
He noted, “This project will contribute to increased government revenue through both foreign exchange earnings and overall fiscal growth. It also reflects the need for greater productivity within Nigeria’s economy, as we aim to strengthen our international competitiveness, especially in light of the African Continental Free Trade Agreement where Nigeria seeks to play a prominent role within ECOWAS and across the African continent.”
He further elaborated on the importance of the project in the evolving global trade environment, stating, “As the world moves away from open trade under the World Trade Organisation towards a more protectionist stance, regional and continental markets will become even more vital. Nigeria is positioning itself to be a significant player in these markets.”
Edun also highlighted the significance of fiscal reforms like the National Single Window Project, which play a critical role in boosting revenue and ensuring the successful implementation of reforms that benefit both local and international stakeholders.
He stressed that by following the guidelines of the new National Development Plan, the government is committed to establishing a solid framework for its policies and programs. This, he said, would not only enhance fiscal stability but also improve Nigeria’s economic competitiveness on the global stage.
In a related development, the Federal Executive Council also ratified the African Medicines Agency (AMA) Treaty, which was initially adopted by the African Union Heads of State during their 32nd summit in Addis Ababa in February 2019. As of now, 37 African Union member states have signed the treaty, with 26 states having ratified it.
Ali Pate, the Coordinating Minister of Health and Social Welfare, shared that Nigeria’s decision to join the AMA is part of its strategy to strengthen its regulatory framework for medical products. He explained that this step would enhance access to safe and effective medicines and contribute to the establishment of a unified regulatory system for pharmaceuticals across the continent.
Pate highlighted that Nigeria’s ratification of the African Medicines Agency (AMA) Treaty will significantly expand the market for locally produced goods, allowing Nigerian products to gain access to a broader African market.
He emphasised that this move will help shift the perception of “Made in Nigeria” to “Made in Africa,” thereby enhancing Nigeria’s trade potential across the continent.
“The Federal Executive Council has directed that Nigeria ratify the treaty and take all necessary actions to implement it. The goal of the treaty is to improve the regulatory capacity of all signatory countries, ensuring that they can better regulate medical products, increase access to safe and effective medicines, and adopt common standards across Africa. This will ultimately contribute to creating a Pan-African regulatory framework for medicines, medical products, and pharmaceuticals,”Pate stated.
Pate also explained that by advancing in this direction, Nigeria will be able to expand its market for manufactured goods, allowing the country to trade not only within its borders but also with other African nations.
“As we move forward, the products we produce will have a much broader market. This expansion will benefit the entire value chain, allowing us to trade with other African countries for what they produce as well,” he said.
In another key decision, the Federal Executive Council approved the release of N12 billion to procure essential diagnostic equipment for tertiary healthcare facilities across the country. This includes the purchase of three MRI machines and two CT scanners, which will be distributed to key healthcare centers such as the University of Uyo Teaching Hospital (Akwa Ibom), the Federal Medical Center in Abeokuta, Obafemi Awolowo University in Ile Ife, the Federal Medical Center in Keffi (Nasarawa State), Modibbo Adamawa University Teaching Hospital in Yola (Adamawa State), and the Federal Teaching Hospital in Kebbi State, along with other vital infrastructure improvements.
Pate emphasised the significant progress being made in Nigeria’s healthcare infrastructure, particularly at the primary and tertiary levels. “We are steadily building our health infrastructure, and these improvements are visible in teaching hospitals.”
“The transformation that the President promised is already starting to take shape. We need to keep this momentum going, and we are committed to continued investment in this sector. The total cost for these healthcare improvements stands at N12 billion,” he added.