Nigeria: FEC approves $509.3mln to clear pension liabilities

Zawya

05-02-2025

The Federal Executive Council (FEC) has approved the issuance of a Federal Government bond worth N758 billion to settle outstanding pension liabilities owed to retirees under the old Defined Benefit Scheme.
This was disclosed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during a media briefing after the FEC meeting presided over by President Bola Tinubu at the Presidential Villa, Abuja, on Tuesday.
Edun explained that the approval authorizes the Debt Management Office (DMO) to raise the funds needed to clear the backlog of pension arrears that have accumulated over the years, providing long-awaited relief to thousands of affected retirees.
'This approval is to clean up an important area and ensure people receive their rightful pension payments as and when due,' Edun stated.
'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 outstanding liabilities stem from accrued entitlements under the old pension system, which preceded the current Contributory Pension Scheme (CPS) introduced in 2004 and updated in 2014.
Edun noted that these arrears had built up over time due to periodic wage increases that were not immediately reflected in pension adjustments.
'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 added.
In addition to addressing pension arrears, the FEC also approved a €30 million concessional loan from the French Development Agency to support student housing projects across Nigeria.
The initiative, in partnership with Family Homes Fund Limited, aims 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,' Edun said.
Furthermore, the FEC granted approval for the implementation of the National Single Window Project, a major digital initiative designed 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),' Edun noted.
The National Single Window, which integrates customs and other regulatory processes into a unified digital platform, is expected to be fully operational within 24 months.
Edun emphasized that the government remains committed to harmonizing and prioritizing its economic reform agenda, focusing on key areas such as attracting investments to stimulate growth and create jobs, enhancing food and energy security, improving fiscal conditions through increased revenue generation, strengthening social protection programmes, and timely implementation of the National Development Plan.
'The economic management team will continue to align these approvals with President Tinubu's priorities to stabilize the economy, reduce poverty, and ensure sustainable growth,' he said.
Edun also highlighted that the benefits of ongoing reforms are beginning to materialize, citing improved fiscal strength and increased competitiveness of the Nigerian economy as early indicators of progress.
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