Economy
Nigerian Pension Funds Outperform Bench Mark Index
By Quantitative Financial Analytics
Nigerian pension funds once again recorded another year of brilliant performance in 2016 roundly beating the NSE Pension Index by wide margins.
The NSE Pension index ended the year 2016 at 810.04 points from its 2015 value of 815.16 points, thereby ending the year down by 5.13 points or -0.63%.
Savings Retirement Accounts (RSA):
Except for APT Pension Retirement Saving Account which ended the year with a negative performance of 22.96%, having lost N0.65 on the unit price of the RSA, every other RSA ended the year with positive performance of 8% or greater. The highest return of 12.67% came from AXA Mansard Pension Retirement Savings Account, followed by Future Unity Glanvills (FUG) RSA with 11.93%
Retiree Accounts:
The performance of the Retiree Accounts followed closely that of the RSA but unlike the RSAs, the Retiree Accounts did much better with no losses recorded by any one of them. Trust Pension Fund Retiree Account led the performance league with 14.68%. All the Retiree Accounts but one, recorded double digit positive return in 2016.
Asset Allocation is Everything
Asset allocation has been said to be responsible for most of the investment fortunes in history. That too can be rightly said about Nigerian pension funds. The implication of asset allocation is that it matters how a portfolio is divided between Bond, Equities, Cash, Money Market and other asset classes. Most Pension funds in Nigeria allocate at least 75% of their Asset Under Management (AUM) to fixed income securities (Government Bonds, Treasury Bills and corporate bonds). The interest rate on those assets has been on the increase over time and the CBN has signaled that it does not plan to reduce the rates any time soon. Though there is an inverse relationship between interest rate (yield) and bond prices, the increasing yield environment especially at the shorter end of the yield curve implies that matured bonds or treasury bills are being reinvested at higher yields and lower prices which benefits the pension funds. By having much of their AUM in fixed income securities, these PSAs tend to be insulated from the downside pressure of the stock market.
Asset Characteristics too
Another pointer to the performance of the Pension funds can be seen by looking at how they behave in relationship to the entire stock market. All the Pension funds have Betas of less than 1 indicating that they do not move in tandem with the stock market. This indication is also supported by the low R-Squared of the pension funds. All these relatively low statistics derive from the fact that majority of the pension fund assets are held in fixed income and money market instruments whose correlation with the market is relatively low.
A beta of 1 indicates that the security’s price moves in tandem with the market but a beta of less than 1 means that the security is imperially less volatile than the market while a beta of greater than 1 indicates that the security’s price is theoretically more volatile than the market. R-Squared on the other hand is a measure of the percentage of a portfolio’s or security’s performance that is attributable to the performance of its bench mark.
The implication of this is that for risk averse investors planning and saving for their retirement, it may be more prudent to overweight on pension fund assets by making additional voluntary contributions rather than investing same in the regular stock market.
Risk Adjusted Performance
Though the RSAs and other Retiree accounts are expectedly and comparatively less risky than similar products like Fixed Income Mutual Funds (as evidenced by their standard deviation of returns), their performance is not as mouthwatering as they seem when analyzed on a risk adjusted basis. Most of the pension funds have negative Alpha and negative Sharpe ratio, according to research by Quantitative Financial Analytics.
Alpha is a measure of the return on an investment compared to a suitable market index such that an alpha of 1% means the investment’s return over a period was 1% better than the market during that same period while an alpha of -1 means the investment underperformed the market. Sharpe ratio measures the risk adjusted performance of an asset or portfolio taking into consideration the prevailing risk-free rate.
The major reason for the negative alpha and Sharpe ratio is that the risk-free rate in Nigeria is quite high, (a risk-free rate of 15% was used for this analysis). Granting the low risk characteristics of the pension funds and the rising interest environment in Nigeria and compared to the performance of other asset classes, it will be appropriate to say Bravo to the pension fund managers for a job well done in 2016.
Contacts: in**@****************ia.com
By Modupe Gbadeyanka
This news will surely excite local contractors with verified claims of N100 million or less, as the federal government has approved their payments.
This approval for the disbursement was given by the Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele.
This followed a verification and reconciliation exercise designed to ensure only validated claims qualify for payment.
The beneficiaries cover contractors across multiple ministries, departments and agencies. The release of the funds is expected to enable contractors to return to project sites, pay workers, settle suppliers and meet outstanding financial commitments.
In an announcement on Monday, the Federal Ministry of Finance also said this latest batch of payments would ease liquidity pressure on small businesses and accelerate economic activity nationwide.
It was noted that the payments for verified claims of N100 million below were strategically done to spread economic impact broadly rather than concentrate disbursements among a handful of large firms.
The payments form part of a broader push to clear inherited contractor obligations, with over N700 billion verified in recent months.
“For many beneficiaries, the release of funds represents more than a financial transaction. It provides the certainty needed to sustain operations, preserve jobs, complete ongoing projects, and contribute to economic recovery and growth,” the ministry said in a statement.
By Aduragbemi Omiyale
Lagos State is currently agog because of the high-profile guests in the city for the Invest in Lagos Summit 3.0 commencing today, Monday, June 8, 2026.
The programme, which ends tomorrow, is themed Lagos: Business Gateway to Africa. It will feature a line-up of sessions focused on Lagos as Africa’s Global Gateway, the Future of Technology and Innovation, Unlocking Investment, Building the Cities of the Future, Global Partnerships for Growth, Talent, Creativity and Culture, and Energy and Sustainability.
The event is being put together by the Lagos State government and Commonwealth Enterprise and Investment Council (CWEIC).
The venue of the summit, Eko Hotel and Suites, is already lively, with the Lagos State Governor, Mr Babajide Sanwo-Olu; the Minister of Finance and Coordinating Minister for the Economy, Mr Taiwo Oyedele; the co-chair of the Lagos Finance and Investment Council (LFIC), Aigboje Aig-Imoukhuede; and the chief executive of Moniepoint Incorporated, Mr Tosin Eniolorunda, amongst others expected to speak.
The workshop is designed to position Lagos as Africa’s premier destination for investment, trade, innovation, infrastructure development, and economic partnerships.
It is focused on unlocking investment opportunities and accelerating sustainable economic growth. It will bring together high-level participants from across the public and private sectors to explore opportunities in technology, infrastructure, energy, manufacturing, finance, creative industries, and urban development.
According to the Lagos Commissioner for Information and Strategy, Mr Gbenga Omotoso, the programme has been carefully structured to move beyond conversations and focus on actionable outcomes that can stimulate investment inflows into Lagos State.
He said the conference will provide a platform to showcase the state’s investments in transportation, technology, energy, manufacturing, tourism, and urban development, while also highlighting opportunities for local and international investors.
“Invest in Lagos 3.0 is more than a conference; it is a strategic platform designed to connect investors with opportunities, facilitate meaningful partnerships, and showcase Lagos as Africa’s most attractive investment destination.
“Through this summit, we are bringing together government leaders, global investors, development institutions, and business executives to explore opportunities that will unlock growth, create jobs, and accelerate economic development across Lagos and Nigeria,” the Commissioner, who doubles as the Head of the Media Subcommittee, stated.
The gathering will also feature investment pitches by governors, exhibitions by participating organisations, networking opportunities, a gala dinner, and site visits to major infrastructure and industrial projects, including the Dangote Petroleum Refinery, Lagos Free Zone, Lagos Port, and RusselSmith’s advanced manufacturing facility.
By Adedapo Adesanya
The federal government has expressed readiness to leverage the €59 million West Africa Sustainable Ocean Programme (WASOP) as part of intensified efforts to combat illegal, unreported and unregulated (IUU) fishing while strengthening sustainable management of its marine resources.
The Minister of Marine and Blue Economy, Mr Adegboyega Oyetola, made this known in Abuja during a meeting with the European Union Ambassador to Nigeria, Mr Gautier Mignot, where both sides reaffirmed their commitment to deepening cooperation on maritime security and sustainable ocean governance.
Welcoming the EU Ambassador, Mr Oyetola commended the group for its longstanding partnership with Nigeria, particularly its support for maritime stability in the Gulf of Guinea, a region critical to global shipping and regional economic development.
He noted that the West Africa Sustainable Ocean Programme (WASOP) presents a timely opportunity to strengthen coordinated action against illegal fishing, improve ocean governance, and promote sustainable exploitation of marine resources across West Africa.
He said Nigeria is keen to fully engage with the programme to attract technical and financial support that will enhance enforcement capacity and boost the country’s blue economy ambitions.
The Minister stressed that illegal fishing remains a major threat to the marine ecosystem and coastal livelihoods, warning that IUU fishing continues to deplete fish stocks, undermine food security, and erode the economic well-being of coastal communities.
He said: “Illegal, unreported, and unregulated (IUU) fishing is a direct threat to national security, food sovereignty, and the survival of our coastal communities. We cannot afford to stand by and watch our marine ecosystems be depleted and economic livelihoods eroded.
“We are calling for an era of stronger international collaboration, backed by aggressive monitoring and uncompromised enforcement systems, to permanently dismantle these illicit operations and safeguard our waters.”
Mr Oyetola also highlighted ongoing reforms in Nigeria’s maritime sector under the National Policy on Marine and Blue Economy, which prioritises innovation, private sector investment, and sustainable development of ocean resources.
He referenced key milestones in the sector, including improvements in port operations and logistics, as well as enhanced maritime security.
He further noted that Nigeria is strengthening initiatives aimed at expanding its maritime infrastructure and improving competitiveness in global trade.
The Minister also reiterated the need for broader cooperation beyond piracy control, urging development partners to support Nigeria in addressing environmental crimes, human trafficking, and illegal fishing in a more integrated and coordinated manner.
He sought increased technical assistance from the European Union, particularly in surveillance systems, fisheries monitoring, and enforcement capacity to strengthen Nigeria’s ability to curb IUU fishing across the Gulf of Guinea.
On his part, Mr Mignot reaffirmed the European Union’s commitment to strengthening maritime cooperation with Nigeria and supporting regional efforts to ensure safer and more sustainable oceans.
He highlighted the West Africa Sustainable Ocean Programme (WASOP), a major EU-funded initiative designed to promote integrated ocean governance, sustainable fisheries management, and protection of coastal and marine ecosystems across West African countries.
According to him, the programme will support improved coordination among coastal states, strengthen enforcement mechanisms, and promote a more inclusive and sustainable blue economy in the region.
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