Socio-Economic Rights and Accountability Project (SERAP) has sent an
open letter to President Muhammadu Buhari urging him to use his “good
offices and leadership position to urgently instruct the
Director-General and Board of the National Pension Commission [NPC] to
use their statutory powers to stop the 36 state governors from borrowing
and/or withdrawing N17 trillion from the pension funds purportedly for
‘infrastructural development.'”
The governors last week reportedly proposed to borrow around N17
trillion from the pension funds after receiving a briefing from the
Kaduna State Governor, Mallam Nasir el-Rufai, who is the Chairman of the
National Economic Council Ad Hoc Committee on Leveraging Portion of
Accumulated Pension Funds for Investment in the Nigeria Sovereign
Investment Authority [NSIA].
But in a letter dated 5 December 2020, and signed by SERAP deputy
director Kolawole Oluwadare, the organization said: “Allowing the
governors to borrow from pension funds would be detrimental to the
interest of the beneficiaries of the funds, especially given the
vulnerability of pension funds to corruption in Nigeria, and the
transparency and accountability deficits in several states.”
SERAP said: “It is patently unjust and contrary to the letter and spirit
of the Nigerian Constitution 1999 [as amended], the Pension Reform Act,
and the country’s international anti-corruption and human rights
obligations for the Federal Government and state governors to repeatedly
target pension funds as an escape route from years of corruption and
mismanagement in ministries, departments and agencies [MDAs].”
SERAP expressed “serious concerns that the proposed borrowing by the 36
state governors from the pension funds would lead to serious losses of
retirement savings of millions of Nigerians.”
The letter copied to the Attorney General of the Federation and Minister
of Justice Mr. Abubakar Malami, SAN, read in part: “This proposed
borrowing faces the risks of corruption and mismanagement, and would
ultimately deny pensioners the right to an adequate standard of living
and trap more pensioners in poverty. Rather than devising ways to
address pensioner poverty, governments at all levels would seem to be
pushing to exacerbate it.”
“Allowing the governors to borrow money from the pension funds would
amount to a fundamental breach of constitutional provisions, the Pension
Reform Act, and Nigeria’s international obligations, as well as
fiduciary duties imposed by these legal instruments on all public
officers to prevent pension funds from unduly risky investments, and to
ensure transparency and accountability in the management of pension
funds.”
“We would be grateful if your government would indicate the measures
being taken to instruct the NPC to stop the 36 state governors from
borrowing and withdrawing any money from the pension funds within 14
days of the receipt and/or publication of this letter.”
“If we have not heard from you by then as to the steps being taken in
this direction, the Registered Trustees of SERAP shall take all
appropriate legal actions to compel your government to implement these
recommendations in the interest of millions of Nigerian pensioners.”
“It would also be very difficult to hold state governors to account for
the spending of pension funds, as states have persistently failed to
account for the spending of public funds including security votes.”
“Transparency is a key instrument in the spending of any pension fund
investment, as it is necessary to ensure the accountability of the
funds. However, several states routinely claim that the Freedom of
Information Act is not applicable within their states.”
“Pension funds should not be used to make up for the failure of
governments at all levels to cut the cost of governance, and the
persistent refusal to reduce wastage and corruption in MDAs, as well as
failure to obey court orders to recover life pensions collected by
former governors and their deputies, and public funds collected by
corrupt electricity contractors who disappeared with the money without
executing any power projects.”
“Many state governors have repeatedly failed to pay workers’ salaries
and pensions; several states are failing to pay contributory pension.
Therefore, allowing state governors to collect a windfall of pension
funds at the expense of pensioners who continue to be denied the fruit
of their labour would amount to double jeopardy.”
“Fiduciary duties require public officers to ensure that pension funds
are managed solely and exclusively for the benefit of pensioners, and to
consider the socio-economic and human rights impact of pension
investment decisions on the intended beneficiaries.”
“Our requests are brought in the public interest, and in keeping with
the requirements of the Nigerian Constitution 1999 [as amended], the
Pension Reform Act 2014, and Nigeria’s international obligations,
including under the UN Convention against Corruption, and the
International Covenant on Economic, Social and Cultural Rights.”
“Your government has a legal obligation under articles 1 and 5 of the UN
Convention against Corruption to prevent and combat corruption
effectively, to promote integrity, accountability and proper management
of public affairs and public property, including pension funds.”
“Public confidence and accountability in public administration are
instrumental to the prevention of corruption and greater efficiency.
Article 10 requires Nigeria to take measures to enhance transparency in
its public administration relative to its organization, functioning,
decision-making processes, and/or other aspects, including pension fund
investment. Nigeria has ratified the convention.”
“Under section 85 of the Pension Reform Act, pension funds and assets
can only be invested in accordance with the regulations set by the NPC.
Section 100 prohibits mismanagement or diversion of pension funds.
Therefore, the proposed borrowing by governors from the pension funds is
implicitly inconsistent and incompatible with the letter and spirit of
the Act, and with Nigeria’s international obligations.”
“Several states have also failed to observe Convention No 29 on Forced
Labour and other international standards on the right of workers to the
timely payment of salaries and pensions. Borrowing from the pension
funds is also implicitly inconsistent with the right to work recognized
by various ILO instruments and article 6 of the International Covenant
on Economic, Social and Cultural Rights, to which Nigeria is a state
party.”
“The right to work is essential for realizing other human rights and
forms an inseparable and inherent part of human dignity. The governors
cannot on the one hand fail to pay workers’ salaries and pensions while
on the other hand proposing to withdraw money from pension funds.”