.Say it’ll avail PFAs wider investment opportunities
Pension consultants have projected that Nigeria’s pension assets will reach N50 trillion by 2031, up from N31.5 trillion, contingent on capital market deepening.
They said this can be achieved through the creation of more investable instruments to sustain asset growth.
The experts said a broader and more liquid capital market would provide Pension Fund Administrators (PFAs) with wider investment opportunities, generate stronger long-term returns and support economic development.
They spoke while reacting to the recent announcement by the Director-General of the National Pension Commission (PenCom) that assets under the Contributory Pension Scheme (CPS) had increased by 51 per cent over the past two years, rising from N20.79 trillion in July 2024 to N31.48 trillion as of July 2026.
Speaking with the News Agency of Nigeria (NAN) on Sunday, Dr Babatunde Raimi said Nigeria must strengthen its domestic capital market to accommodate the growing size of pension assets.
According to him, government should create more investable instruments to absorb long-term pension funds, as large pension assets require equally large-scale investment opportunities.
“Deep capital markets improve liquidity, enhance returns and strengthen the capacity of pension funds to finance economic development.
“Government should create more investable instruments to strengthen domestic capital markets and in turn boost pension assets,” he said.
Raimi also advocated greater diversification of pension investments into infrastructure, agriculture value chains, Real Estate Investment Trusts (REITs), venture capital, private equity, green finance and digital economy projects.
He said such diversification would reduce excessive dependence on government securities while improving long-term risk-adjusted returns.
The consultant urged PenCom to expand the Personal Pension Plan by leveraging fintech firms, mobile money operators, cooperatives, trade unions, professional associations and market associations to drive enrolment, particularly among informal sector workers.
He said pension registration should be simplified through the use of Bank Verification Numbers (BVN), National Identity Numbers (NIN) and mobile technology, with flexible daily, weekly and monthly contribution options.
Raimi also called for stronger compliance with pension remittances through technology-driven enforcement, including payroll integration, tax databases, Corporate Affairs Commission records, NIN verification and Artificial Intelligence-based compliance monitoring.
According to him, improved financial literacy is equally important, as many workers still perceive pensions as deductions rather than long-term investments.
He recommended pension education from the National Youth Service Corps (NYSC), universities, civil service induction and corporate onboarding, while advocating tax incentives to encourage additional voluntary pension contributions.
Projecting the industry’s outlook, Raimi said pension assets could exceed between N45 trillion and N50 trillion within the next three to five years if sustained contributions, moderate investment returns, stronger compliance and macroeconomic stability were maintained.
He noted that technological innovations, including Artificial Intelligence, blockchain and automation, would improve onboarding, compliance, fraud prevention, customer service and investment reporting.
Raimi urged the Federal Government to sustain macroeconomic stability, curb inflation, strengthen fiscal discipline, expand formal employment and accelerate infrastructure projects capable of attracting long-term pension capital.
He also advised PenCom to strengthen digital supervision, encourage prudent investment diversification, improve transparency and contributor education.
He urged Pension Fund Administrators (PFAs) to enhance customer engagement and retirement planning services.
Also, another pension consultant, Mr Ehimeme Ohioma, said expanding pension participation in the informal sector would require targeted incentives to encourage enrolment and build public confidence.
He made reference to Rwanda’s model, where government matched pension contributions for a specified period to boost participation before withdrawing the incentives after contributors had gained confidence in the scheme.
Ohioma also recommended investing a minimum of 10 per cent of pension assets under management in foreign currency-denominated assets to strengthen diversification.
“To drive increased participation of the informal sector requires incentivising the participants, one way or the other, at least for an initial period of time one to three years.
“That is the model used by governments to kickstart and motivate parricipation, Rwanda is a very good example.
“It matched contributions up to a certain percentage, for a period of time, then stopped when participants were confident and trusted the system.
“Several ideas can be reviewed in this regard, though funding may be a challenge considering the current state of govt’s finances,” he said.
Ohioma emphasised the need for continuous enforcement of pension laws and regulations, stronger risk-based supervision of licensed pension operators and prompt funding of pension obligations by governments and employers.
According to him, the recent increase in pension assets was driven by regular pension contributions and strong investment returns, prompt payment of accrued retirement benefits by the current administration, unlike previous delays that sometimes lasted up to two years.
Ohioma said PenCom’s technology-driven initiatives to improve compliance, expand coverage and encourage more states to adopt the CPS would further sustain growth in the pension industry.
“I foresee sustained growth in the pension industry if the current momentum and initiatives by PenCom are properly executed and emerging challenges are promptly addressed,” he said.
