Nigeria is preparing to revisit its pension investment regulations that will allow a greater share of the country’s $17 billion pension assets to flow into infrastructure and private equity, two sectors seen as critical to driving higher returns for retirees and fueling national development.
The National Pension Commission (PenCom) confirmed that it is in the final stages of reviewing the current rule, which caps pension fund allocations to alternative asset classes at 5 percent. According to PenCom spokesman Ibrahim Buwai, the new thresholds are expected to be unveiled before the end of the current quarter.
While final figures have not been disclosed, Buwai explained that the reforms will not only raise the ceiling but also ease a restrictive requirement that currently forces infrastructure funds to allocate at least 60 percent of their portfolios to projects domiciled in Nigeria.
“This adjustment will broaden the scope of eligible investments and improve diversification opportunities for pension fund administrators,” Buwai said.
The reforms are being driven by calls from pension fund managers for more flexibility to invest beyond traditional fixed-income instruments, which currently account for about 62 percent of pension fund assets. The heavy reliance on fixed income has left funds vulnerable to macroeconomic shocks, particularly with inflation stuck above 20 percent for two straight years and the naira losing around 70 percent of its value against the U.S. dollar.
“We are not really okay with returns the way they are because inflation is having a significant negative impact,” Buwai admitted.
“We really want to see traction in those alternative assets to complement returns from the fixed income and the traditional assets.”
The potential shift marks a significant step in reshaping the role of pensions in Nigeria’s broader development agenda. In April, PenCom’s Director General, Omolola Oloworaran, underscored the importance of pension funds in bridging Nigeria’s infrastructure and investment gaps.
She disclosed that pension fund investments totaling N5.51 trillion have already been channeled into infrastructure, private equity, real estate, and subnational initiatives. At the same time, the industry’s Net Asset Value (NAV) jumped by 22.65 percent year-on-year, climbing from N18.36 trillion in December 2023 to N22.51 trillion by December 2024. The growth, she explained, was fueled by steady contributions and rising investment income.
Despite the progress, Oloworaran acknowledged a persistent bottleneck: the limited number of investable instru
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