Pension Fund Investments Hit ₦14.4trn as States Owe ₦306bn

Investments by Pension Funds in Federal Government (FG) securities increased by 18.7% year-on-year in the first quarter of 2025, rising to ₦14.48 trillion from ₦12.20 trillion recorded in the same period of 2024.

This was revealed in the latest industry portfolio report from the National Pension Commission (PenCom), detailing the sector’s performance for the quarter ending March 31, 2025.

Analysts attributed the growth in FG securities investment to the high-interest rate regime implemented by the Central Bank of Nigeria (CBN) over the past six months, alongside the relatively low risk associated with government instruments.

With inflation on the rise, the CBN has maintained the Monetary Policy Rate (MPR) at 27.5% since December 2024. The MPR serves as the benchmark interest rate for both government and corporate securities in Nigeria.

According to the report, FG securities accounted for 62% of the total pension fund assets, which stood at ₦23.32 trillion.

The investments included FGN Bonds, Treasury Bills, Agency Bonds, Sukuk Bonds, and Green Bonds. Among these, Hold Till Maturity (HTM) FGN Bonds represented the bulk of investments, amounting to ₦12.389 trillion or 85.5% of total FG securities. Available for Sale (AFS) FGN Bonds followed, totaling ₦1.397 trillion or 9.6%. Treasury Bills came third with ₦593.217 billion, accounting for 4.1%, while Sukuk Bonds stood at ₦9.248 billion, representing 0.6%.

Victor Chiazor, Head of Investment and Research at Fidelity Securities Limited, commented on the trend, saying, “The increase in PFAs’ investment in FG securities in Q1 was driven by the prevailing high interest rate environment. The CBN, aiming to control inflation, has consistently maintained the MPR since the start of the year.”

Mallam Garba Kurfi, Managing Director/CEO of APT Securities and Funds Limited, added, “Investing in FG Bonds is essential for PFAs due to their availability and lower risk profile, especially at a time when equities, despite offering higher returns, carry greater risk.”