By the end of 2024, Nigeria’s pension industry had navigated a year of shifting economic tides, emerging stronger with assets reaching ₦22.5 trillion, according to PenCom.
At the heart of this growth was a deepening reliance on Federal Government of Nigeria (FGN) securities, which continued to dominate pension fund portfolios.
Throughout the year, PFAs actively expanded their Assets Under Management (AUM), which climbed from ₦4.2 trillion in March 2024.
At the same time, pension fund investments in FGN securities rose by 18% year-on-year, reaching ₦14.1 trillion.
Nevertheless, despite this impressive progress, the industry remained underdeveloped, with total pension assets accounting for only 8% of Nigeria’s GDP.
Moreover, FGN Bonds continued to dominate pension fund investments, comprising 53 per cent of total pension AUM.
PFAs further increased their holdings in these bonds by 5 per cent to ₦12 trillion, largely due to regulatory limits and the high-interest rate environment.
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Additionally, pension fund managers significantly boosted investments in treasury bills, more than tripling their holdings to ₦704.5 billion by the end of the year.
More Funds In Money Markets & Equities
Beyond government securities, PFAs allocated more funds to money market instruments, driving a 33% year-on-year increase to ₦2.2 trillion.
Meanwhile, the domestic equities market thrived, delivering a 37.7% return, which led to a ₦670.7 billion rise in pension AUM tied to equities, bringing the total to ₦2.2 trillion.
Finally, as more individuals joined the pension scheme, the number of pension accounts grew by 4% to 10.6 million.
Consequently, the average RSA balance increased to ₦2.13 million.
With strong investor confidence and regulatory backing, Nigeria’s pension industry continues to expand.
However, further efforts are necessary to unlock its full potential.