Players in Nigeria’s pension industry are urging regulators to expand investment guidelines to allow allocations into export-oriented businesses, toll roads, real estate, and high-growth unlisted companies, in a bid to boost returns for contributors. The call comes amid rising inflation and sustained naira depreciation, which continue to erode the real value of pension assets, according to a Bloomberg report on Thursday.
Data from the National Pension Commission (PenCom) showed that pension assets stood at N24.63 trillion as of June, with most of the funds invested in government securities.
Chief Executive of the Pension Fund Operators Association of Nigeria, Oguche Agudah, said managers are “looking toward alternative investments to be able to cover any potential losses.” Dave Uduanu, CEO of Access ARM Pensions, also highlighted opportunities in export-oriented firms, toll road projects, and unlisted high-growth companies.
Olumide Oyetan, CEO of Stanbic IBTC Pension Managers Ltd, called on authorities to issue inflation-indexed floating-rate bonds, arguing such instruments would protect fixed-income portfolios — currently the bulk of industry holdings — from negative real returns.
While pushing for broader reforms, operators note they are already increasing exposure to private equity, infrastructure funds, and real estate investment trusts within current rules.
The industry shift mirrors a wider global trend, with inflows into private credit now exceeding $1.5 trillion worldwide.
PenCom confirmed that a review of investment guidelines is underway, with new rules expected this quarter. At a sensitisation workshop in Lagos, the Commission encouraged Pension Fund Administrators (PFAs) to diversify into alternative assets, stressing the need for dynamic strategies to withstand macroeconomic headwinds.
“The current environment of inflation, foreign exchange volatility, and declining purchasing power requires a different investment playbook,” said PenCom’s Director-General, Omolola Oloworaran. “Alternative assets provide a complementary pillar to core strategies. Investments in infrastructure and private equity, in particular, align with pension fund horizons, enhance diversification, and improve risk-adjusted returns.”
Nigeria’s inflation rate stood at 21.88% in July, remaining in double digits since 2015. Meanwhile, the naira has lost nearly 70% of its value against the dollar since May 2023, when authorities unified segments of the foreign exchange market.
