Pension Fund Administrators invested about N6.84trillion in the Federal Government securities, representing 71.43% of N9.58tn total pension assets as of the end of September 2019, Pension Asset Membership Data report obtained by Nairametrics revealed.
The report stated that while the Federal Government’s securities took a huge chunk of the pension assets, state government bonds and corporate bonds took the balance of 28.57%.
- The highest amount of N4.47tn invested in the Federal Government bonds alone
- 2.26tn invested in Treasury bills, while investment in Sukuk bond, agency bond, and green bond followed with N80.52bn, N10.69bn and N13.37bn respectively
- The N10.69bn agency bond was invested in two government agencies, the Nigeria Mortgage Refinancing Company and the Federal Mortgage Bank of Nigeria
- Sum of N125.24bn was invested by the PFAs in state governments securities
For the private sector, an analysis of the report showed that the sum of N492.08bn was invested in domestic ordinary shares, while foreign ordinary shares had a total investment of N65.14bn.
Other security instruments where funds were invested were corporate bonds, with N572.4bn; infrastructure bonds, N17.79bn; and supranational bonds, N4.03bn.
Similarly, the sum of N8.4bn was invested by the PFAs in foreign money market securities; N21.8bn in mutual funds; N231.58bn in real estate; N32.05bn in private equity fund; while cash and other asset investments had N26.7bn.
The huge appetite of PFAs for investing in government securities is beginning to be a source of concern due to a need to deploy these funds to the real sector of the economy.
The issue was part of deliberations at the last Monetary Policy Committee meeting held at the headquarters of the Central Bank of Nigeria.
The CBN Governor, Godwin Emefiele, while confirming this shortly after the MPC meeting, said the committee urged the fiscal authorities to ask the National Pension Commission to direct the PFAs to refocus their investments away from government securities into other productive sectors of the economy.