FG to Raise N758bn Bond to Settle Pension Liabilities

The Federal Government has announced plans to issue bonds totaling N758bn to clear outstanding pension obligations.

This covers debts accrued under the old Defined Benefit Scheme before the Contributory Pension Scheme was introduced in 2004, as revealed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during a press briefing in Abuja on Tuesday.

Edun addressed State House Correspondents following the 23rd Federal Executive Council meeting at the Aso Rock Villa, where he detailed the government’s strategy to settle pension liabilities through the Debt Management Office’s issuance of bonds amounting to N758bn.

These liabilities accumulated due to periodic salary increases over the years, and their settlement will provide long-overdue relief to affected retirees.

According to Edun, “A key social intervention is addressing pension payments. The government has approved the issuance of a Federal Government Bond of about N758bn through the Debt Management Office.

“This bond issuance will clear the backlog of pension liabilities owed to various pensioners under the old defined benefit scheme, which preceded the contributory pension system introduced in 2004 and updated in 2014.

“These liabilities built up over time due to wage increases. For instance, a retiree under the defined benefit scheme required additional payments whenever salaries were increased, approximately every five years. Over time, these obligations accumulated to a level that made them difficult to pay regularly.

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“To resolve this critical issue and ensure timely payment of pension entitlements, the government has authorized the Debt Management Office to raise N758bn, which will clear all outstanding liabilities, providing significant relief to pensioners.”

The council also sanctioned a €30m (N46.30bn) long-term concessional financing package from the French Development Agency.

Edun stated that this financing, in collaboration with Family Homes Fund Limited as the implementing agency, aims to provide clean-energy-based student housing in tertiary institutions nationwide to alleviate accommodation shortages.

“We secured a €30m long-term concessional loan from the French Development Agency to support student housing in collaboration with Family Homes Fund Limited as the implementing partner.

“This project will establish sustainable, clean energy-powered accommodation for students across multiple tertiary institutions. The initiative is crucial in addressing the acute shortage of student housing in the education sector,” he explained.

Regarding economic growth and resilience, the Minister announced the Federal Government’s approval of the National Single Window Project, designed to enhance Nigeria’s export competitiveness and efficiency.

He stated that technology providers and hardware suppliers have received authorization to commence the project.

The hardware components are expected to be completed within 12 months, while the software, technology, and e-government components will be implemented over a 24-month period.

According to the Minister, the National Single Window Project will boost government revenues and improve Nigeria’s global competitiveness, particularly under the African Continental Free Trade Agreement.

He elaborated, “This project will enhance government revenue through increased efficiency in trade processes, generating foreign exchange and higher tax revenues.

“It also promotes productivity within the Nigerian economy and strengthens international trade competitiveness. With the African Continental Free Trade Agreement in effect, Nigeria aims to establish itself as a major player within ECOWAS and the wider African market.

“This initiative is particularly crucial as global trade shifts away from open markets to more regionally focused economies, making continental trade partnerships increasingly important for Nigeria.”

The Minister emphasized that, given the volume of approvals, the economic management team will harmonize and prioritize projects in line with the President’s key objectives.

These include attracting investments, job creation, poverty reduction, and strengthening food and energy security.

Edun also highlighted the significance of fiscal reforms such as the National Single Window Project in enhancing revenue generation and delivering the benefits of economic reforms to domestic and international stakeholders.

By adhering to the National Development Plan, the government aims to establish a structured approach to implementing programs and policies, ensuring fiscal stability and increasing economic competitiveness.

Meanwhile, the council ratified the African Medicines Agency Treaty, originally adopted by the African Union Heads of State during their 32nd meeting in Addis Ababa in February 2019.

To date, 37 African Union member states have signed the treaty, with 26 completing ratification.

The Coordinating Minister of Health and Social Welfare, Prof. Ali Pate, stated that by joining the treaty, Nigeria aims to enhance its medical product regulatory framework, improve access to safe and effective medicines, and establish a continent-wide regulatory system for pharmaceuticals.

According to Pate, ratification will expand the African market for Nigerian-made pharmaceutical products, transitioning “made in Nigeria” to “made in Africa.”

“The Federal Executive Council has approved Nigeria’s ratification of the treaty and instructed necessary actions to implement its provisions.

“The treaty aims to enhance the regulatory capabilities of all ratifying states, ensuring access to safe, quality-assured, and effective medical products. It promotes the adoption of common pharmaceutical standards across Africa, paving the way for a Pan-African regulatory framework.

“This development will expand market opportunities for Nigeria’s pharmaceutical industry, allowing locally produced medicines to reach a wider African consumer base. Likewise, Nigeria can engage in trade with other African nations for their pharmaceutical products,” Pate explained.

Additionally, the council approved N12bn for procuring critical diagnostic equipment for tertiary healthcare facilities. This includes three MRI machines and two CT scanners, which will be distributed across major tertiary hospitals nationwide, alongside other essential medical infrastructure upgrades.

The Minister noted that Nigeria’s healthcare infrastructure continues to advance at both primary and tertiary levels.

“We are gradually enhancing our healthcare system, not only at the foundational level but also at specialized tertiary hospitals. Significant improvements are already evident.

“Nigeria is now attracting patients from neighboring regions, and even from distant locations like the United Kingdom and the United States, for high-quality medical care,” he stated.