Abuja, Feb. 5, 2025 – The Federal Executive Council (FEC) has approved the issuance of N758 billion bond to settle pension liabilities to retirees under the old Defined Benefit Scheme.
Wale Edun, the Coordinating Minister for the Economy, disclosed this in Abuja on Tuesday after the FEC meeting.
He said the approval would enable the Debt Management Office (DMO) to raise the funds needed to clear the backlog of pension arrears that have accumulated over the years.
“This approval is to clean up an important area and ensure people receive their rightful pension payments as and when due.
“The government has put in place an approval for the DMO to raise N758 billion, which will pay down all these liabilities and be a tremendous relief to the beneficiaries,” the minister said.
He said the liabilities stemmed from accrued entitlements under the old pension system, adding that the arrears had built up over time due to periodic wage increases that were not immediately reflected in pension adjustments.
“That is to clear up the backlog of pension liabilities owed various categories of pensioners who are owed funds under the defined benefit system that preceded the defined Contributory Pension Scheme that came into force in 2004 and of course, was updated with a new Act in 2014.
“There were some accrued liabilities that were building up over time. So, for example, some one who was on a defined benefit scheme yet to retire, would need a top-up of their contributions or the amount due to them every time that there was a wage increase, every five years or so.
“So, this liability that built up to a point where it was not going to be easy to pay them down on an ongoing basis, and so to clean up that important area and to give people their right, which is payment of the pension liabilities as and when due, the government has put in place an approval for Debt Management Office to raise N758 billion that will pay down all these liabilities and of course, be a tremendous relief to the beneficiaries.”
“For instance, someone on the defined benefit scheme would need a top-up every time there was a wage review, typically every five years.
“These liabilities accumulated to a point where it became difficult to manage on an ongoing basis, hence the need for this bold intervention,” he said.
Edun said FEC also approved a €30 million concessional loan from the French Development Agency to support student housing projects across Nigeria.
He said the initiative was in partnership with Family Homes Fund Limited to alleviate the acute shortage of student accommodation in tertiary institutions while promoting sustainable, clean-energy housing solutions.
“We all know how critical this intervention is for the education sector, given the significant shortfall in student accommodation nationwide,” he said.
The minister said FEC also approved the implementation of the National Single Window Project to streamline trade processes, enhance revenue collection, and boost Nigeria’s competitiveness in international markets.
“This project speaks directly to improving Nigeria’s economic efficiency, increasing government revenue, and enhancing our capacity to compete effectively, especially under the African Continental Free Trade Agreement (AfCFTA),” he said.
Edun said the national single window would be fully operational within 24 months.