The Pension Fund Operators Association of Nigeria (PenOp) has announced plans to enhance the role of pension funds in infrastructure financing across the country. Chief Executive Officer Oguche Agudah highlighted the increasing involvement of pension funds in initiatives like the Nigeria Infrastructure Debt Fund, aimed at addressing Nigeria’s infrastructure deficit while securing stable, long-term returns. In the first half of 2024, Pension Fund Administrators (PFAs) invested N103.86 billion in infrastructure bonds, a 14% rise from 2023, driven by a high-yield investment environment.
Agudah also emphasized the promising outlook for the pension industry, citing regulatory advancements and diversification of investments into alternatives like private equity and venture capital. These measures align with global trends and aim to boost returns while fostering economic development. Efforts to involve the informal sector in pension contributions are expected to broaden the industry’s asset base, which reached N21.92 trillion in October 2024, a 24.14% increase year-on-year. Growth has been fueled by higher contributions due to salary adjustments and robust investment performance amidst a high-yield climate.
PenOp noted a diversification in asset portfolios, with pension funds investing more in equities and private equity, resulting in growth rates of 35.03% and 71.75%, respectively. Despite this, government securities remain a dominant asset class, growing by 19.87%. Agudah attributed the industry’s performance to strategic diversification, favorable fiscal policies, and competitive yields in fixed-income instruments, bolstered by the Central Bank of Nigeria’s interest rate hikes. This strategy underscores the sector’s commitment to maximizing long-term returns while managing risks effectively.