Pension Funds’ investment in infrastructure grew by 54.1% YoY to N242.243 billion in 2024 from N157.230 billion in 2023, indicating increased participation in infrastructure financing in the country.
However, infrastructure funds still account for 0.9% of the total Pension Funds Net Asset Value, NAV, which stood at N22.512 trillion in 2024.
Vanguard’s analysis from the latest data released by the National Pension Commission, PenCom showed that Pension Fund Administrators, PFAs, in 2024, committed N214.325 billion in Infrastructure Funds up from N143.371 billion in 2023 while Corporate Infrastructure Bonds gulped N27.918 billion up from N13.859 billion in 2023.
Reacting to this development, Michael Oyebola, Managing Director, Money Counsellors, said: “Pension Funds are set to play a more prominent role in financing infrastructure projects, particularly through vehicles like the Nigeria Infrastructure Funds, Infrastructure Bonds and others which will help address the country’s infrastructure deficit while targeting stable, long-term returns.”
He added that the outlook for the Nigerian pension industry remains positive, with continued growth driven by regulatory advancements and expanding investment opportunities.
“The ongoing review of investment guidelines and the Pension Reform Act is expected to increase allocations to alternative investments, such as infrastructure, private equity, and venture capital. This shift aligns with global trends and supports the diversification of pension fund portfolios, helping to ensure higher returns and contributing to broader economic development. Moreover, expanding the involvement of the informal sector in pension contributions is expected to further boost the industry’s asset base and broaden its reach.”
In his own reaction, David Adonri, Analyst and Vice Executive Chairman at Highcap Securities Limited, said : “A high-yield environment was the main attraction for these players.
“With its growing asset base, strategic diversification, and a favourable regulatory environment, the Nigerian pension industry is positioned for sustained growth. However, to fully realise this potential, maintaining stability in monetary and fiscal policies, alongside managing inflationary pressures, will be crucial to ensuring the long-term financial security of retirees.”
