President Bola Tinubu has sought the National Assembly’s approval to raise N757.98 billion through the issuance of Federal Government bonds in the domestic debt market.
The fund is intended to settle longstanding pension liabilities owed to retired civil servants under the Contributory Pension Scheme (CPS).
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The president’s request was presented in a letter read by the Senate President, Godswill Akpabio, during the plenary on Tuesday.
In the letter, Mr Tinubu explained that the proposed bond issuance will be managed by the Debt Management Office (DMO) and will cover outstanding obligations as of 31 December, 2023.
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“I write to request for the kind approval of the National Assembly for the issuance of Federal Government of Nigeria FGM bonds in the domestic debt market by the Debt Management Office to settle outstanding pension liabilities under the Contributive Pension Scheme as of December 2020 in the sum of 757,983,246,571 Naira,” the letter reads partly.
Pension challenges in Nigeria
In Nigeria, retiring from public service does not always mean rest or financial relief. For many retirees at both federal and state levels, accessing their pension benefits is a long and painful journey with delays, bureaucratic bottlenecks, and some even lost their lives while struggling to get their benefits.
Nigeria operates a dual pension system. The federal government retirees are mostly under the Contributory Pension Scheme (CPS) managed by the National Pension Commission (PenCom) and Private Pension Fund Administrators (PFAs).
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State government retirees, however, fall under different schemes depending on whether a state has adopted the pension scheme or remains under the Defined Benefits Scheme (DBS), an older system often plagued by corruption, underfunding, and irregular payments.
While the CPS is designed to ensure sustainability and prompt disbursement, it is still burdened by unpaid accrued rights, delayed remittances, and weak enforcement.
In many states, pensioners are made to queue for hours or even days under the sun for verification or payment.
For instance, in 2022, a retiree in Kano State reportedly fainted while waiting in a queue during a pension verification exercise. In 2019, about three pensioners reportedly died in Benue State after waiting years without receiving a dime of their entitlements. In Imo State, elderly pensioners protested repeatedly over unpaid entitlements, with some collapsing during demonstrations.
Many of the retirees still struggle to feed, access healthcare, or send grandchildren to school. Those without family support are particularly vulnerable.
Purpose and impact
In the letter, President Tinubu emphasised that the move is not only a fiscal necessity but also a significant step toward restoring trust in Nigeria’s pension system.
He noted that the settlement of the backlog would enable the federal government to meet its commitments under the pension scheme, thus improving the welfare of retirees.
READ ALSO: Tinubu to attend ECOWAS 50th anniversary, inaugurate projects in Lagos
“It will enable the Federal Government of Nigeria to meet its obligations under the CPS and restore confidence in the pension industry. Positive welfare effects on the retirees as this will enable them to meet their basic needs such as women’s full routine jobs, rent, school fees of their children and other family needs. This will improve the health and avoid untimely death of the retirees.
“It has potential to contribute to productivity and morale of public servants as this will assure them of the Federal Government of Nigeria’s commitment to meeting pension obligations, and for settlement of pension liabilities have potential to improve aggregate demand and economic growth because it will enhance liquidity in the economy,” President Tinubu said.
After reading the letter, Mr Akpabio referred the request to the Senate Committee on Local Debt, Local and Foreign Debt.
He directed the committee to review the proposal and present its findings to the Senate within two weeks.
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