Nigeria: World Bank abandon N130b pension liabilities

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Nigeria: World Bank abandon

N130b pension liabilities

By Emeka Anaeto
Vanguard, May 22, 2003

LAGOS — There are indications that talks on the resolution of the estimated US $1.00 billion (about N130 billion) unfunded pension liabilities of public enterprises are deadlocked.

Director of Legal Services of Bureau of Public Enterprises (BPE), Mrs. Irene Chigbue, who gave this indication yesterday at the interactive session between BPE and the stakeholders in the privatization of public enterprises told Vanguard that efforts had now shifted towards designing a new national pension scheme.

According to Chigbue, BPE had sent proposal to the Federal Government and the World Bank on how they could assist in resolving the pension crises but the World Bank has turned down the proposal.

She also said that the Federal Government was no longer keen at funding the pension fund as it has chosen to set up a new pension scheme that would prevent a re-occurrence or accumulation on the existing problem.

On the side of BPE, she said that the bureau has taken steps to sell some non-core assets of the public enterprises to raise money for the accumulated pension deficit.

She, however, stated that income from the disposal of assets would be grossly inadequate to address the liabilities, adding that the Federal Government has indicated that it has no money to inject in the pension fund.

Already Vanguard learnt that the Presidency has contracted Mr. Fola Adeola, former Managing Director of Guaranty Trust Bank Plc, who was the Chairman of the Committee on Pension Scheme to do a fresh proposal from the report of the committee, on how to structure a new pension scheme for the country. He is to liaise with the office of the Secretary to the Government of the Federation and the Head of Service.

Also Chigbue said that the BPE has already contracted a consultant to structure an independent pension scheme to enable it advise the government properly on the new pension scheme being planned.

The pension crises reached a feverish point when the BPE’s privatization programme got into public enterprises that had hitherto ran as monopolies.

These include NITEL, National Electric Power Authority (NEPA), the Railway and Nigerian Airways, as well as other enterprises in the oil and gas sector, maritime, transport and mining sectors.

Consequently, in the BPE’s offer for sale of shares of NITEL, the bureau had to strip the non-core assets in the valuation of the company’s total assets. It is believed that similar measure would be taken in the privatization of other public enterprises.