Pension Assets Grow from N2.5tr to N6.2tr in 5 Years

By Modupe Gbadeyanka

For a period of 5 years, Nigeria recorded a considerable growth in its pension assets, moving from N2.45 trillion in December 2011 to N6.16 trillion in December 2016, FSDH Research reports.

This rise indicates a Compounded Annual Growth Rate (CAGR) of 20.24 percent.

Based on the data from the National Bureau of Statistics (NBS) and the National Pension Commission (PenCom), it was however revealed that the pension penetration in the country still remains very low.

This is calculated by the ratio of the number of registered workers on the Retirement Savings Account (RSA) to the working population or the ratio of pension assets to the Gross Domestic Product (GDP).

The number of registered workers on the RSA as at December 2016 stood at 7,348,028 out of a total working population of 69,470,901, representing a 10.58 percent pension penetration level.

The NBS disclosed that the main reason for the low level of pension penetration in Nigeria is the high percentage of Nigeria’s working population operating in the informal sector of the economy.

It stated further that micro businesses account for over 90 percent of total Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria.

However, the Federal Government said it was making efforts to work on the low level of pension penetration in Nigeria.

Last week, the government made changes by introducing new pension guidelines. This, it hopes would make pension administration better in the country.

In the data also released the NBS, the RSA membership distribution data for Q1 2017 reflected that 7,493,590 workers were registered under the pension scheme.

Information from FSDH Research was used in the story.