Photo caption: PenCom logo
Nigeria’s pension industry continued its steady growth in May 2025, as assets under management climbed to N24.10 trillion, reflecting a 1.91% increase from N23.65 trillion recorded in April, according to the National Pension Commission (PenCom).
This upward trend was fuelled by rising new enrollees in Retirement Savings Accounts (RSAs), strong investment returns, and tactical asset reallocation into both fixed-income and alternative asset classes, despite persistent macroeconomic uncertainty.
Investments in Federal Government of Nigeria (FGN) securities remained the most significant component of pension portfolios, growing by 2.04% to N14.95 trillion and constituting 62.06% of total pension assets.
Among FGN-backed instruments:
FGN Bonds (Held-to-Maturity) rose 1.73% to N12.67 trillion, accounting for 52.56% of total Net Asset Value (NAV), and held their status as the largest investment class.
Treasury Bills increased 5.15% to N604.59 billion, indicating heightened interest in short-duration instruments amid changing interest rate expectations.
Green Bonds inched up 0.74% to N2.32 billion.
Agency Bonds and Sukuk Bonds declined by 14.66% and 10.31%, respectively, pointing to a decrease in investor appetite.
State Government Securities contracted by 3.07%, showing signs of retreat from subnational debt instruments.
Corporate Debt Securities experienced a slight decline, slipping by 0.98% to N2.29 trillion, representing 9.51% of NAV. Meanwhile, money market placements saw a 6.07% upswing to N2.31 trillion, making it the fastest-growing category month-on-month.
Within the money market category:
Fixed Deposits and Bank Acceptances surged 7.58% to reach N1.96 trillion.
Commercial Papers dipped by 6.78% to N257.67 billion, likely due to subdued short-term financing demand.
Foreign Money Market Instruments jumped 19.22% to N68.97 billion, the most notable percentage gain across all asset classes in the month.
Domestic Equities improved markedly, rising by 6.78% to N2.75 trillion, now making up 11.40% of total NAV—a clear sign of increased investor confidence in the Nigerian Exchange.
Foreign Equities also recorded gains, increasing by 4.67% to N290 billion, reflecting a calculated push toward portfolio diversification and foreign currency earnings exposure.
Additional notable allocations included:
Mutual Funds expanded 2.13% to N183.99 billion, largely driven by a 2.93% increase in Open/Close-End Fund investments.
Supranational Bonds and Private Equity advanced 2.12% and 0.55%, respectively.
Infrastructure Funds posted a marginal gain of 0.36% to N229.88 billion, while REITs edged up 1.15%.
Cash and Other Assets plummeted by 30.88%, indicating a more aggressive move by Pension Fund Administrators (PFAs) to reduce non-performing idle balances.
Total RSA registrations climbed to 10.76 million by May 2025, a steady increase from 10.72 million the previous month.
Fund distribution remained consistent with historical trends:
Fund II, designed for active contributors below age 49, led with N10.04 trillion in assets, representing 41.65% of total pension funds.
Fund III, aimed at contributors aged 50 and above, rose to N6.32 trillion, amounting to 26.24% of the total.
Fund IV (Retirees Fund) reached N1.79 trillion, contributing 7.42% of NAV.
Fund I, targeted at younger, risk-tolerant investors, grew 4.73% to N319.34 billion.
Fund V, designed for informal sector workers under the Micro Pension Plan, increased slightly to N1.41 billion, maintaining a 0.04% share.
Closed Pension Fund Administrators (CPFAs) and Approved Existing Schemes (AES) controlled N2.62 trillion and N2.85 trillion, translating to 10.80% and 11.81% of total NAV, respectively.
The May report reveals that PFAs remain cautiously optimistic, favouring government-backed instruments for stability, while gradually shifting into high-yield alternatives like infrastructure, private equity, and global markets. The expanding interest in foreign equities and diversified asset classes suggests a forward-looking strategy amidst inflationary and interest rate concerns.
