Pension Funds Inject ₦5.51 Trillion into Nigeria’s Real Sector – PenCom Tells IMF

By LOVETH AZODO,  Lagos

The National Pension Commission (PenCom) has revealed that Nigeria’s pension industry has committed ₦5.51 trillion to asset classes that promote long-term financing and real sector development.

This disclosure was made during a meeting between PenCom and a delegation from the International Monetary Fund (IMF), led by Senior Financial Sector Expert, Mr. Jose De Luna, on April 7, 2025.

The session formed part of the IMF’s 2025 Article IV Consultations with Nigerian institutions.

Speaking on behalf of the Director General of PenCom, Ms. Omolola Oloworaran, the Head of the Commission’s Surveillance Department, Abdulrahaman Muhammad Saleem, said the investments were spread across infrastructure, private equity, real estate, and subnational projects.

He said the growing allocation to the real sector underscores the pension industry’s strategic role in funding Nigeria’s economic development and in supporting sustainable growth through long-term investment.

In a presentation to the IMF team, PenCom reported that the pension industry’s Net Asset Value (NAV) rose by 22.65 percent in 2024 from ₦18.36 trillion at the end of December 2023 to ₦22.51 trillion as of December 31, 2024. The increase was driven by fresh contributions and investment income.

Despite this growth, PenCom raised concerns about the limited number of investable financial instruments available in Nigeria that meet regulatory standards for pension fund investment.

According to the Commission, only 86 instruments currently qualify under its broad investment index those that are liquid and meet the required free float thresholds.

The Director General stressed the need to broaden the investment landscape, noting that although the Investment Regulation provides avenues for diversified investment, the domestic market has not produced a sufficient range of high-quality, investable instruments.

To address this, PenCom said it would intensify collaboration with capital market operators to expand the pool of eligible financial products.

The Commission is also pushing for greater pension fund participation in alternative assets, with the aim of boosting real returns while ensuring the sustainability of the Contributory Pension Scheme (CPS).

During the meeting, PenCom briefed the IMF team on the industry’s investment strategies, asset quality issues, and ongoing regulatory reforms aimed at strengthening the sector.

The Commission also highlighted its collaboration with regulatory bodies such as the Securities and Exchange Commission (SEC), the Debt Management Office (DMO), and the Pension Fund Operators Association of Nigeria (PenOp) to develop new investment opportunities.

The IMF delegation commended PenCom for its prudent regulation of the pension industry and the significant growth recorded in recent years. They lauded the Commission’s efforts to diversify pension fund investments and its proactive approach to ensuring the long-term viability of Nigeria’s pension system.