The Nigerian pension industry has become the engine room for growth in the real sector, committing a total of ₦5.51 trillion to asset classes that support long-term financing. These investments span infrastructure, private equity vehicles, real estate, and subnational infrastructure initiatives, among others. More would have been committed, but an avalanche is held back because of limited availability of investible instruments that meet the minimum requirement for pension funds investments in Nigeria.
The Director General of the National Pension Commission (PenCom), Ms. Omolola Oloworaran, made this disclosure during a meeting with a delegation from the International Monetary Fund (IMF), which visited the Commission on 7 April 2025 as part of the Fund’s 2025 Article IV Consultations. The delegation, led by Mr. Jose De Luna, Senior Financial Sector Expert, held discussions with PenCom’s key officials on matters relating to the pension industry and broader financial sector developments.
Represented by the Head, Surveillance Department, Abdulrahaman Muhammad Saleem, the Director General told the delegation that pension fund investments in the real sector of the economy are indicative of the pension industry’s vital role in providing funding for key economic growth and development in Nigeria.
In a presentation to the delegation, PenCom said the industry Net Asset Value (NAV) increased by 22.65% from N18.36 trillion as of 31 December 2023 to N22.51 trillion as of 31 December 2024. The growth was attributable to additional contributions received and investment income.
However, the Director General decried the limited availability of investable instruments that meet the minimum requirements for pension funds’ investments in Nigeria currently. She told the delegation that only 86 investable instruments, constituting part of the pension broad index, meet the minimum quality requirement for pension fund investments that are liquid and have the required free float. This is despite the numerous provisions made in the Investment Regulation to foster increased eligible investment outlets. Despite the readiness of flapping funds it cannot fly because its bogged down by lack of additional investible instruments to the already existing 86.
Going forward, PenCom will continue to collaborate with capital market operators to broaden the spectrum of eligible financial instruments for pension fund investments. This initiative aims to further diversify portfolios and enhance real returns. Additionally, the Commission will promote increased pension fund investment in alternative asset classes. These efforts are intended to strengthen the overall investment portfolio and reinforce the long-term growth and sustainability of the Contributory Pension Scheme (CPS).
During the meeting, PenCom presented key developments within the pension industry, focusing on investment strategies, asset quality concerns, financing for growth, and regulatory challenges. Noteworthy was PenCom’s commitment to fostering the development of diverse asset classes and securities eligible for pension fund investments. This initiative involves collaboration with 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 ongoing efforts to diversify pension fund investments. Additionally, they commended PenCom’s regulation and supervision of the pension industry in Nigeria. Overall, the IMF praised PenCom for the remarkable growth achieved within Nigeria’s pension industry, recognising the Commission’s pivotal role in driving positive momentum and ensuring long-term sustainability.
