PFAs’ predominant holdings of FGN paper

The assets under management (AUM) of the Nigerian regulated pension industry increased by 21.0% y/y in May to N8.14trn (US$26.6bn). They are growing at a reasonable rate yet, at just 7.2% of 2017 GDP, are running well behind many emerging markets. Nigeria was relatively late (2004) in introducing legislation creating a sound structure for regulated pensions. If the industry is to come close to realizing its full potential, forward-looking leadership from the regulator and new products to extend coverage across the economy are required.


  • The industry’s holdings of FGN paper amounted to 69.3% of their AUM in May, compared with 73.1% one year earlier. The beneficiary has been domestic money market securities, which gained a 2.7% share over the period.
  • The role of the PFAs in local debt markets remains pivotal. Their holdings of FGN bonds at end-May represented 44.2% of the stock of the instruments at end-March.
  • PenCom’s latest data do not point to a surge of investment in domestic equities. The NSEASI rose by 29.2% in the 12 months to end-May while AUM in the asset class increased by 26.7% over the same period.
  • Revised Pencom regulations stipulate that retirement savings accountholders under the age of 49 must have at least 10% exposure to equities by end-2018. If we add foreign equities to domestic, we arrive at a total of 9.2% at end-May in aggregate (ie accountholders of all ages including those with a smaller or zero requirement to hold equities). Those aged 50 or above represented 25.7% of the total.

Sources: National Pension Commission (PenCom); FBNQuest Capital Research


  • PenCom data as at end-May show a total of 8.08 million scheme memberships, implying an average portfolio of N1.01bn.


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