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Nigeria’s pension industry portfolio has experienced significant growth, increasing by 22.60% to reach N22.51tn as of December 2024, up from N18.36tn in December 2023. This growth is attributed to a 1.15% month-on-month increase in pension assets, which rose from N22.26tn to N22.51tn.¹

The National Pension Commission’s latest monthly report reveals that the total number of registered Retirement Savings Account holders stands at 10,582,299. Investment in Federal Government securities remains a top choice for licensed pension fund administrators, followed by corporate debt securities, money market instruments, and mutual funds.

Notably, investments in private equities have doubled, reaching N147.86bn in December, a 106.35% increase from N71.66bn in the previous year. Infrastructure funds also saw significant growth, rising by 49.49% to N214.34bn, while domestic and foreign ordinary shares increased by 41.8% to N2.51tn.

The Pension Fund Operators Association of Nigeria commented on the rise in interest in private equities, stating, “This suggests a rising interest in alternative investments… Alternative investments usually pose a higher risk than traditional asset classes but provide the potential upside of beating inflation in a high-yield environment.”

The association also highlighted the growth in infrastructure funds, noting, “This reflects an increasing emphasis on infrastructure investment, possibly driven by policy incentives encouraging pension fund participation in long-term development projects.

The association further noted that the growth in domestic and foreign ordinary shares, which increased by 41.8% to N2.51tn, was impressive, stating, “Domestic and foreign ordinary shares grew by 41.8%, increasing from N1.77tn to N2.51tn, with the Nigerian All Share Index recording another impressive year.”

Commenting on the expansion of money market instruments, which grew by 32.9% to N2.22tn, the association said, “Money market instruments expanded by 32.9%, from N1.67tn to N2.22tn, with yields on Nigerian FG treasury bills reaching their highest in years as the apex bank tried to rein in inflation.”

The association also observed that while FGN securities remained the largest asset class in absolute terms, growing by 18.37% to N14.11tn, the growth was relatively slower, indicating a gradual shift towards equities and alternative assets. “FGN securities, while still the largest asset class in absolute terms, grew by a more moderate 18.37%, increasing from N11.92tn to N14.11tn,” the association stated.

Similarly, corporate debt securities grew by 17.8% to N2.25tn, indicating a continued interest in this asset class. The association noted, “Corporate debt securities grew by 17.8%, from N1.91tn to N2.25tn.”

Private equity, which involves medium- to long-term finance provided in return for an equity stake in potentially high-growth unquoted companies, has become an increasingly attractive option for pension fund administrators. As the pension industry continues to grow and evolve, it is likely that alternative investments, including private equity, will play a larger role in the portfolios of licensed pension fund administrators.

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