From Adanna Nnamani, Abuja
Despite scathing economic conditions, Nigeria’s pension fund assets surged to N22.86 trillion as of January 31, 2025.
The growth represents a 1.55 per cent increase from the N22.512 trillion recorded in December 2024, highlighting the sector’s resilience and continued expansion despite prevailing economic uncertainties.
According to the latest figures from the National Pension Commission (PenCom), as disclosed in its January 2025 report, the Nigerian pension industry continues to demonstrate remarkable stability. The consistent growth is attributed to strategic asset allocations, a diversified investment portfolio, and increasing confidence in the pension system among contributors. The industry’s resilience further underscores its critical role in the country’s financial ecosystem, safeguarding the retirement savings of millions of Nigerians.
A closer look at the investment distribution reveals that Federal Government of Nigeria (FGN) securities remain the dominant investment asset, accounting for N14.309 trillion—62.59 per cent of the total net asset value (NAV). This strong reliance on government securities ensures stability, as these instruments are backed by sovereign guarantees, making them a relatively safe investment choice. Other key allocations include local company ordinary shares at N2.406 trillion (10.53 per cent), corporate debt securities at N2.267 trillion (9.92 per cent), and money market instruments at N2.182 trillion (9.55 per cent).
Despite the overall growth, certain segments experienced slight declines. Money market instruments saw a marginal 1.50 per cent drop from N2.215 trillion in December 2024 to N2.182 trillion in January 2025. Within this category, fixed deposits and bank acceptance instruments recorded a modest 1.13 per cent increase, while commercial paper declined sharply by 13.33 per cent. Additionally, foreign money market instruments dropped by 26.07 per cent, reflecting shifting investment priorities within the sector. On the other hand, supranational bonds witnessed an impressive 34.09 per cent surge, reaching N27.851 billion, indicating an evolving investment landscape that seeks to maximize returns through diversified holdings.
Under the Multi-Fund Structure, Fund II—the default Retirement Savings Account (RSA) Fund—continues to dominate, with N9.431 trillion, representing 41.26 per cent of total pension assets. Other key funds also recorded notable growth: Fund III rose by 1.62 per cent to N6.014 trillion, while Fund IV saw an even stronger expansion of 3.64 per cent, reaching N1.674 trillion. The growing RSA membership base further signals increasing confidence in the pension system, with enrollees rising by 0.31 per cent from 10,582,299 in December 2024 to 10,615,028 in January 2025.
On a year-on-year basis, pension fund assets have recorded an impressive 17.05 per cent surge, jumping from N19.530 trillion in January 2024 to N22.861 trillion in January 2025. This sustained expansion is driven by increased pension contributions and higher portfolio values. Notably, FGN securities alone have expanded significantly, growing from N12.139 trillion in January 2024 to N14.309 trillion in January 2025, reinforcing their pivotal role in the investment strategy of pension fund administrators.
The remarkable growth trajectory of Nigeria’s pension industry highlights its resilience and long-term sustainability. As more Nigerians embrace the pension scheme and contributions continue to rise, the sector is poised for further expansion. Strategic investments and prudent fund management will remain key in ensuring optimal returns for contributors while maintaining financial security for retirees. With a strong regulatory framework and increasing confidence in the system, experts note that Nigeria’s pension sector remains a strong fulcrum on which the economic stability of Nigeria revolves.