Nigeria’s Pension Fund Asset under Management grew to N7.164trillion as at the third quarter of 2017, according to latest figures from the National Bureau of Statistics (NBS).
This is against the N6.832trillion reported in the previous quarter of the year.
As contained in the Pension Asset and RSA Membership Data Q1 – Q3 2017 released by the statistics office, 7,710,564 workers were registered under the pension scheme, though compared to 7,589,936 registered workers in Q2 2017.
“Participants within the age distribution below 40years have the highest percentage composition closely followed by participants less than 30 years and within the age bracket of 40-49 years while participants above 60years has the least percentage composition,” the NBS stated.
The report also reflected that the federal government bonds had the highest weight percentage of 54.09 percent of the total pension fund assets and closely followed by treasury bills with 17.73 percent weight. The NBS reported that the proportion of the funds invested in the domestic ordinary Shares stood at 8.66 percent within the period, while infrastructure funds have the least with 0.07 percent weight.
Nigeria’s pension funds are, today, largely invested in government securities inorder to secure the assets. But there has been clamour for the investment of the funds, particularly in infrastructure, but officials at the Pension Commission (Pencom) which regulates activities in the industry say they were yet to see viable instruments that could enable that process.
Nigeria needs some $3trillion investments to deliver quality infrastructure across different asset classes, including energy, transport, ICT, housing, water, agriculture, mining, social infrastructure, vital registration and security over a 30-year period, according to the Nigeria Integrated Infrastructure Master Plan (NIIMP.
The plan projects that the country would need to increase its core infrastructure stock from 35-40 per cent of the gross domestic product (GDP) in 2012, to 70 per cent by 2043 (prior to GDP rebasing).
Experts say investments in infrastructure-related corporate bonds in Nigeria are currently limited due to low-risk appetite, and limited asset classes to invest in.
But the Nigerian Sovereign Investment Authority (NSIA) earlier in the year set up a $200 million InfraCredit, an infrastructure credit enhancement facility in partnership with GuarantCo, to address the constraints facing the Nigerian pension market, and other long-term investors in investing in long-term bonds to finance the country’s huge infrastructure needs.
InfraCredit was therefore basically created to attract significant new capacity to the infrastructure finance market from the domestic pension funds, insurance companies, and other long-term investors.
Intended as a sustainable framework for stimulating infrastructure investments in key sectors of the Nigerian economy, its successful operation will foster the development of the Nigerian debt capital markets.
Onyinye Nwachukwu, Abuja
