Monday, 25 January 2016

Fashola: Buhari May Not Revoke Jonathan's Contracts

The minister of power, works and housing, Babatunde Fashola has said that the federal government may not revoke contracts awarded under former president Goodluck Jonathan.

Fashola who expressed displeasure over the way past administrations revoked contracts awarded by their predecessors added that “such practice destroys investor confidence in an economy.”

The minster stated this at the Nigerian pension industry strategy implementation roadmap retreat organised by the National Pension Commission (PenCom) and pension operators at the weekend in Abuja.

He said: “We must not play politics with our economy. Investors want continuity. Even where the government of the day finds anomaly in a contract awarded by a past administration, the best approach was to renegotiate the contract to get a better deal rather than outright revocation,” he added.

In a paper titled “overcoming the challenges and managing the risks and constraints that inhibit the investment of private capital and funds in Nigeria’s infrastructure landscape to make a visible economic impact,” he advised PenCom to invest and other operators to invest the over N5 trillion pension fund in construction of infrastructure.

He mentioned such infrastructure as roads, housing, Fourth Mainland Bridge, coastal road linking several coastal states from Lagos to Bayelsa and the new seaports in Lekki and Badagry.

He further recommended investment of the fund in refineries, such as Dangote’s, Ajaokuta steel, petrochemical plants, resuscitation of textile mills; prisons to strengthen justice system and decongest prisons; hostels for universities, power plants for universities, especially those with teaching hospitals, health care and others.

The minister advocated the adoption of a collective national attitude to make it possible to invest the over N5 trillion  fund constituting the contributions of the nation’s working class into real sectors as a means of diversifying  the nation’s economy and achieving inclusive growth.

Fashola, who lamented infrastructure deficit in Africa, said: “This is the time to show that our nation and our national economy is bigger than the challenges posed by dwindling oil prices. This is the time to diversify and change the face of our economy. But the risks that stand in the way of investing the fund are caused by us and they must be changed by us.

“Perhaps, the appropriate starting point will be to acknowledge that pension reforms are just beginning to gain a foothold across most of Africa in jurisdictions as Nigeria, Ghana, Botswana, Kenya and Uganda, to mention a few.

“Perhaps the biggest and most advanced of the pension funds, especially in sub-Saharan Africa is the South African Pension Fund. But while the sizes of these funds are happily growing, and the number of contributors increasing, the impact in the quality of life on the continent is not yet anywhere near minimum globally acceptable standards,” he added.

PenCom said in the first quarter of 201, N4.44 billion was paid as death benefits to the next of kin of 1,450 deceased employees. So far, about N77.18 billion has been paid to the next of kin of 27,321 deceased employees from inception to the end of the first quarter of 2015.