FEC approves ₦758bn bond to settle pension arrears, €30m loan for student housing

The Federal Executive Council (FEC) has approved the issuance of a ₦758 billion bond to clear outstanding pension arrears for retirees under the Defined Benefit Scheme.

The approval was granted during the FEC meeting at the State House in Abuja on Tuesday. The Debt Management Office (DMO) has been mandated to raise the funds to offset the backlog of pension liabilities accumulated before the Contributory Pension Scheme was introduced in 2004 and later reviewed in 2014.

Speaking after the meeting, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, explained that the bond would ease the financial burden on pensioners waiting for their entitlements.

“There was an approval for the government through the Debt Management Office to raise a Federal Government bond of about ₦758 billion. This is to clear up the backlog of pension liabilities owed to various categories of pensioners under the Defined Benefit Scheme,” Edun stated.

He further explained that accrued liabilities had been building up due to periodic wage increases, making it difficult to clear pension obligations as they arose.

“Every time wages increased, adjustments needed to be made for pensioners under the scheme. The liability kept building up, making it hard to settle on an ongoing basis. This bond will ensure pensioners receive their entitlements as and when due, providing much-needed relief to beneficiaries,” he added.

€30 Million Loan for Student Housing

In addition to the pension bond, the FEC also approved a €30 million concessional loan from the French Development Agency (AFD) to support student housing projects.

The loan will be executed in partnership with Family Homes Limited, a government-backed initiative aimed at improving student accommodation across Nigeria.

The financing aligns with the administration’s commitment to enhancing educational infrastructure and improving living conditions for students nationwide.

Edun said: “I will just highlight some particular approvals. First of all, a €30 million financing, long term concessional financing by Agence Francaise de Development (AFD), the French development agency, which is supporting student housing in conjunction with Family Homes formed limited, thats the partner and implementer.

“It is for students tertiary accommodation project sites throughout the country to provide sustainable and clean energy based accommodation for students.

“An approval has been given for the all important National Single Window Project. So, the technology providers, the hardware suppliers, have been approved for implementation of the project.

“Some aspects will take 12 months for delivery of the hardware and for complete implementation, including the software solutions and the technology solutions and the e-government solutions that will take up to 24 months and this project not only speaks to improving the economic competitiveness the international ability to export efficiently, and of the of the Nigerian economy.

“It also speaks to increasing government revenue. So, it’s both on the on the fiscal side, it is both revenue earning in terms of foreign exchange and in terms of government revenue, it speaks to the increased productivity of the Nigerian economy.”

He added: “Increased international competitiveness at a time where under the African continental Free Trade Agreement, Nigeria is pushing to be a big player, both in the ECOWAS region and in the African continent as well.

“Why that is particularly important, we are all seeing that the world is moving away from open trade, from the rules based world trade organization led, world trading environment is moving to a more closed environment, and so the regional and the continental markets will be that more much more important for Nigeria.

“Finally, we also commented that given the plethora, the large amounts of approvals which were given today, that there was the assurance also given that the economic management team is going to harmonize, synthesize, synchronize, and very much prioritize in an orderly fashion, these different approvals in line with Mr. President’s priorities.

“First of all, to attract investment that will grow the economy and create jobs and reduce poverty, but more importantly, to also focus on his immediate priorities for stabilizing for now, implementing what will strengthen the Nigerian economy and grow it and create jobs in the near term.”

“Such as, strengthen food security, enhancing fiscal the fiscal condition, including, as we have seen, the revenue benefits that can come from the National Single window project, increased energy security, strengthen social protection, improved economic competitiveness.

“Timely implementation of the new national development plan, so that we all have a framework in which to implement the various programs and policies of the government, and also to be able to show to all stakeholders the direction in which the government is going, and as we clearly know, the benefits of the reforms are beginning to come through, there is greater fiscal strength, there is greater competitiveness of the Nigerian economy.”