By FBNQuest Research
The assets under management (AUM) of the Nigerian regulated pension industry increased by 20.5 percent y/y in June to N8.23 trillion ($26.9 billion).
They are growing at a reasonable rate yet, at just 7.2 percent 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 70.8 percent of their AUM in June compared with 73.0 percent one year earlier.
The beneficiary has been domestic money market securities, which gained a 1.9 percent share over the period.
The role of the PFAs in local debt markets remains pivotal. Their holdings of FGN bonds at end-June represented 45.2 percent of the stock of the instruments at end-March.
PenCom’s latest data does not point to a stampede into domestic equities. The NSEASI rose by 15.6 percent in the 12 months to end-June while AUM in the asset class increased by 21.6 percent over the same period.
Revised Pencom regulations stipulate that retirement savings accountholders under the age of 49 must have at least 10 percent exposure to equities by end-2018. If we add foreign equities to domestic, we arrive at a total of 9.4 percent at end-June in aggregate (ie accountholders of all ages including those with a smaller or zero requirement to hold equities). Those aged 50 or above represented 25.8 percent of total accountholders.
PenCom data for end-June show a total of 8.14 million scheme memberships, implying an average portfolio of N1.01 billion (unchanged from May).
Dipo Olowookere 
Adedapo Adesanya