From Adanna Nnamani, Abuja
The Nigerian pension industry has allocated N5.51 trillion across various asset classes, strategically supporting long-term financing for the nation’s real sector growth. These investments span critical areas such as infrastructure, private equity, real estate, and subnational initiatives.
Ms. Omolola Oloworaran, Director General of the National Pension Commission (PenCom), shared this during a meeting with the International Monetary Fund (IMF) delegation on Tuesday.
The meeting, part of the IMF’s 2025 Article IV Consultations, saw the delegation, led by Mr. Jose De Luna, Senior Financial Sector Expert, engaging in in-depth discussions with PenCom officials on the evolution of the pension industry and broader financial sector advancements.
Represented by Abdulrahaman Muhammad Saleem, Head of PenCom’s Surveillance Department, the Director General highlighted that the pension industry’s investments in the real sector underscore its crucial role in driving Nigeria’s economic growth and development.
In a presentation to the delegation, PenCom revealed that the industry’s Net Asset Value (NAV) had grown by 22.65 per cent, increasing from N18.36 trillion as of December 31, 2023, to N22.51 trillion as of December 31, 2024. This growth was attributed to additional contributions and investment income.
However, the Director General expressed concerns about the limited availability of investable instruments that meet the minimum requirements for pension fund investments in Nigeria. She noted that only 86 investable instruments, representing part of the pension broad index, meet the necessary criteria of liquidity and free float. Despite the numerous provisions in the Investment Regulation aimed at increasing eligible investment outlets, this remains a challenge.
Looking ahead, PenCom plans to continue collaborating with capital market operators to expand the range of eligible financial instruments for pension fund investments. This effort aims to diversify portfolios and enhance real returns. Additionally, PenCom will encourage greater pension fund investment in alternative asset classes to strengthen the overall investment portfolio and ensure the long-term growth and sustainability of the Contributory Pension Scheme (CPS).
During the meeting, PenCom also presented key developments within the pension industry, focusing on investment strategies, asset quality concerns, growth financing, and regulatory challenges.
The Commission emphasized its commitment to fostering the development of diverse asset classes and securities eligible for pension fund investments, working alongside entities such as the Securities and Exchange Commission (SEC), the Debt Management Office (DMO), and the Pension Fund Operators Association of Nigeria (PenOp).
The IMF delegation expressed satisfaction with PenCom’s efforts to diversify pension fund investments and commended the Commission for its effective regulation and supervision of the pension industry. The IMF also praised PenCom for the impressive growth achieved in Nigeria’s pension sector, acknowledging its pivotal role in driving positive momentum and ensuring the industry’s long-term sustainability.