Tinubu moves to raise ₦757bn Bond to Clear Pension Arrears

President Bola Tinubu has formally asked the National Assembly to approve the issuance of a ₦757 billion Federal Government bond, earmarked to settle pension liabilities accrued under the Contributory Pension Scheme (CPS) as of December 2023.

In a letter read at Tuesday’s Senate plenary, addressed to Senate President Godswill Akpabio, Mr. Tinubu noted that the 2014 Pension Reform Act requires 5 per cent of the monthly wage bill to be devoted to extinguishing existing pension debts prior to CPS implementation. Fiscal constraints, he said, have hampered full compliance, allowing pension arrears to mount.

To bridge the funding gap, the president noted that the Federal Executive Council, at its meeting on February 4, approved raising the necessary funds in the domestic debt market through the Debt Management Office. He invoked Section 44(1)(2) of the Fiscal Responsibility Act 2007, which mandates National Assembly approval for all new federal borrowings. “I write to request the approval of the National Assembly for the issuance of a Federal Government of Nigeria bond in the domestic debt market by the Debt Management Office,” Mr. Tinubu’s letter continued.

Describing the bond as “a vital investment in human capital development,” the president stressed that proceeds would enable the government to meet its CPS obligations, restore confidence in the pension industry and improve retirees’ welfare. He highlighted the tangible impact on pensioners’ lives: “It will enable retirees to meet basic needs such as medication, rent, school fees and other family expenses, thereby improving their health and reducing premature deaths.”

According to the president, issuing the bond will:

1. Clear accumulated CPS pension obligations and restore confidence in the pension industry
2. Improve retirees’ welfare by ensuring timely payment of medical bills, rent, school fees and other living expenses
3. Bolster public servants’ morale and productivity by demonstrating the government’s commitment to its obligations
4. Stimulate aggregate demand and liquidity, thereby supporting economic growth

Mr. Tinubu acknowledged that the bond will raise Nigeria’s public debt stock and increase debt-service costs but argued the long-term social and economic benefits—particularly in human capital development—justify the move.