The Central Bank of Nigeria says it plans to finance infrastructure projects with banking and pension monies.
The governor of the apex bank, Godwin Emefiele made this known recently while speaking on the plans by government to raise the N15 trillion funding for the Infrastructure Corporation of Nigeria Limited, shortly after the Bankers’ Retreat in Lagos.
According to him, the federal government is seeking to reduce its external debts by generating funds through internal sources to finance its projects.
“We have already said that N1tn out of the N15tn would be equity, being contributed by the CBN, African Finance Corporation, and the Nigerian Sovereign Investment Authority. The remaining N14tn would be accessed from the debt market.
“And I must say that we are happy here that these are substantially going to be naira funding. The banks have large pool of funds, the pension administrators have large pool of funds and we are reasonably optimistic that more than 50 per cent, running to two-third of this money is going to be raised locally.
“Before we begin to think about accessing international finance, we would try as much as possible to limit debt from foreign currencies, particularly knowing that some of these projects and revenues are going to be generated with local currency. Where foreign currencies are needed, we will also tap those and then be able to use them,” he said.
Emefiele noted that about N170 billion had been provided as bridge funding for three InfraCo projects already totalling N1 trillion, adding that there were idle funds that could be leveraged and that InfraCo had been set up to give comfort to local investors to put their funds in the project.
However, the President, Pension Funds Operators Association of Nigeria, Mr Wale Odutola said there were no idle funds in the pension industry.
“We have laws that government how pension funds are managed and how they can be invested. I think whatever we have to do will be within those regulations.
“Pension money is not idle, they are invested. They are all fully invested and we have asset allocations that we invest in. whatever we do will be within the framework.”
