By Dipo Olowookere
Federal government has been advised to talk to the National Pension Commission (PenCom) to look for a way to make pension fund administrators in the country invest most of their portfolios in the agricultural and manufacturing sectors of the economy.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), which made this call, said exposure to government securities should be minimised by the fund administrators.
Governor of the CBN, Mr Godwin Emefiele, while addressing newsmen last week in Abuja, said the PFAs can also look into investment in the real estate industry, which provides viable long-term return.
“The committee called on government to urge the pensions commission to improve the prudential requirements for pension funds to refocus their investment portfolio away from their traditional choice of government securities in favour of other viable long-term investments in real estate, manufacturing and agriculture; and indeed infrastructure,” Mr Emefiele said in a communique he read after the two-day MPC meeting.
Speaking further, the apex bank chief said, “The committee called for strong visibility of fiscal and structural policies to improve infrastructure and investment conditions in the economy.
“It expressed strong optimism that the current policies of the bank, in a regime of solid fiscal and structural policy support, would yield strong dividends in closing the current negative output gap in the medium to long term, and place the economy on a sustainable and self-sufficient path of output growth.”
Business Post recalled that last week, the National Bureau of Statistics (NBS) disclosed that investment in FGN securities contributed 71.43 percent to the N9.58trn pension assets in the third quarter of this year. READ IT HERE: FGN Securities Contribute 71.43% to N9.58trn Pension Assets
From the numbers, investment in FGN Bonds gulped 46.71 percent, while treasury bills added 23.62 percent. In value terms, out of the N9.58 trillion pension assets, N6.85 trillion came from FGN securities, with FGN Bonds gulping N4.48 trillion and T-bills N2.26 trillion.
In addition, the local money market securities contributed 11.21 percent or N1.10 trillion to the value weight while foreign money market securities has the least with 0.09 percent weight.
Investment in Sukuk added N80.53 billion or 0.84 percent, while green bonds had N13.38 billion or 0.14 percent, with state government bonds adding N125.24 billion or 1.13 percent and corporate debt securities N621.96 billion or 6.49 percent.
Also, investment in real estate properties N231.48 billion or 2.42 percent, while mutual funds had N21.81 billion or 0.23 percent, with foreign money market securities contributing N8.42 billion or 0.09 percent.
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