The anxiety and worries about the safety of Pension Funds’ Investments in Infrastructure Projects were finally laid to rest at the 2022 Annual International Credit Rating Webinar organised by DataPro Limited, Nigeria’s Technology-Driven Credit Rating Agency (CRA). The Webinar, attended by participants and speakers from all over the world, deliberated on the theme: “Boosting Infrastructure Development Through Pension Funds’ Investments: The Role of Credit Rating Agencies’’.

This year’s webinar was conceptualised to increase the awareness and knowledge among Nigerians on the value propositions of Credit Raters in accelerating economic development, efficient allocation of resources and promoting a shift towards a credit economy with financial opportunities for everybody.

The Director General (DG), Securities and Exchange Commission (SEC), Mallam Lamido Yuguda was represented at the International Webinar by the Executive Commissioner, Corporate Services, SEC, Mr. Ibrahim Boyi who emphasised on the role of credit rating agencies in assessing the credit risk of issuers and their instruments in infrastructure finance. He also affirmed the commission’s readiness to provide the required support to the relevant stakeholders of the Nigerian capital market.

At the Panel discussion moderated by DataPro’s Chief Rating Officer, Prince Oladele Adeoye, financial experts namely Dr. Gbadebo Adenrele of United Capital Plc, Mr. Suru Daniels – Managing Director, Afrinvest Capital Limited and Mr. Olufemi Odukoya – Managing Director, CrusaderSterling Pensions Limited unanimously agreed that every fund advanced for infrastructure development are backed up by restrictions, requirements and regulations that meet all global standards, making the investment of Pension Funds almost risk-free. 

According to them, “Pension Funds are safe in infrastructure development because operators do not go beyond the structures & regulations put in place to ensure their safety”. The Panelists disclosed that Pension Fund Administrators are heavily regulated and that Infrastructure Developments are long-term in nature and require huge capital outlay, stating that the size of Pension Fund Assets available cannot fill the gap required for infrastructural development.

Agreeing that there would not be meaningful sustainable development without attempting to bridge the gap between funding and infrastructural developments, the Panel discussants recommended that infrastructural development projects should be self-liquidating projects and not necessarily come from Bonds. This, they said, will attract private sector participants and help the capital galvanising process.

They further stressed that Pension Fund Administrators have played a major role in infrastructure developments, as more than 25% of funds are generated therein, and 70% of Issue proceeds are directed at infrastructure developments. Additionally, State intervention in the issuance of bond instruments has played a major role in infrastructure development.

Click here for a recap of the webinar.