N5.51 trillion committed to real sector, PenCom tells IMF delegation

The National Pension Commission (PenCom) has disclosed that the Nigerian pension industry has committed a total of N5.51 trillion to asset classes that support long-term financing for real sector growth.

This investment, according to a statement by the commission, spans infrastructure, private equity, real estate, and subnational infrastructure initiatives. It forms part of the industry’s efforts to stimulate economic development and deepen the domestic capital market.

PenCom made the disclosure during a meeting with a delegation from the International Monetary Fund (IMF), which visited the Commission on 7 April as part of the Fund’s Article IV consultations.

The Article IV consultation is an annual exercise where IMF staff assess a country’s economic and financial developments, providing recommendations to foster macroeconomic stability and growth.

The IMF delegation, led by Jose De Luna, a senior financial sector expert, held discussions with key officials of the Commission on developments in Nigeria’s pension industry and broader financial sector reforms.

Representing the Director General of PenCom, Omolola Oloworaran, the Head of the Surveillance Department, Abdulrahaman Saleem, stated that the N5.51 trillion commitment underscores the pension industry’s expanding role in economic growth.

“These investments are indicative of the pension industry’s vital role in providing long-term funds for key sectors of the Nigerian economy,” Mr Saleem told the IMF delegation.

PenCom also revealed that the pension industry’s Net Asset Value (NAV) grew by 22.65 per cent from N18.36 trillion at the end of December 2023 to N22.51 trillion as of 31 December 2024. The Commission attributed the increase to “additional contributions received and investment income.”

However, the Commission raised concerns about the limited availability of quality investable instruments in the Nigerian market.
Ms. Oloworaran, through her representative, said only 86 instruments currently meet the minimum standards required for pension fund investments, particularly in terms of liquidity and free float.

“This is despite the numerous provisions in our Investment Regulation to foster increased eligible investment outlets,” she said.

To address these concerns, PenCom said it is collaborating with capital market operators to broaden the range of financial instruments eligible for pension investments. The commission is also promoting increased allocations to alternative asset classes to enhance portfolio diversification and real returns.

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During the engagement, PenCom presented key developments in its investment strategy, regulatory challenges, and future priorities.

The commission said it is working with institutions such as the Securities and Exchange Commission (SEC), the Debt Management Office (DMO), and the Pension Fund Operators Association of Nigeria (PenOp) to build a more robust investment ecosystem.

The IMF delegation expressed satisfaction with PenCom’s investment strategy and praised its regulatory oversight. “We commend PenCom for the remarkable growth and for maintaining sound regulation and supervision of the pension industry,” Mr De Luna said.