Liquidity risks dashing hopes of investing N6tn Pension fund in infrastructure
The Head of Investment Supervision Department, PenCom, Mr. Ehimeme Ohioma explained the major obstacles hindering the direct investment of pension fund into mega schemes like infrastructure.
Speaking at the closing ceremony of the seminar organized for Pension, Insurance and Labour Correspondents and Business Editor, by PenCom, Ohioma said “The scarcity of alternative assets products and liquidity squeeze hobbling the economy now are key frustrating factors in the investments of pension fund.
Only recently, the agency said the fund currently stood at about N6tn.
But other constraints to pension funds commitment to infrastructure include policy inconsistencies on the side of government and the risk-free FGN fixed income instruments which had further crowded out alternative assets.
According to him, only availability of commercially viable projects, full repayment guarantee by the federal government especially in the early stages of projects financing can guarantee the investments.
However, Ohioma presented some lee ways to drive the investment of pension fund in critical infrastructure. He listed open and transparent transactions’ procedures and processes, in terms of biddings process, contractors’ selection, pricing and that government should institute policies to attract global infrastructure advisors and managers, in order to build capacity of operators.