by NIyi JACOBS
Nigeria’s pension fund managers are urging the National Pension Commission (PenCom) to relax investment rules to allow them channel more funds into alternative assets, as inflation and naira depreciation erode returns.
The operators, who manage ₦26.4 trillion ($17 billion) in retirement savings, want approval to increase allocations to export-oriented businesses, toll roads, real estate, and high-growth unlisted firms, according to Access ARM Pensions CEO Dave Uduanu.
Nigeria’s inflation rate currently hovers around 22% and has remained in double digits since 2015. Coupled with a 70% drop in the naira’s value since May 2023, returns on fixed-income assets have sharply diminished.
“Pension funds are looking toward alternative investments to be able to cover any potential losses,” said Oguche Agudah, CEO of the Pension Fund Operators Association of Nigeria.
PenCom has confirmed that a review of the guidelines is underway, with a decision expected this quarter. Stanbic IBTC Pension Managers CEO Olumide Oyetan disclosed that operators are also pushing for inflation-indexed floating-rate bonds to help shield portfolios from negative real returns.
Despite existing limits, funds have already increased exposure to alternative assets. In the first half of 2025, allocations to private equity more than doubled to ₦229.4 billion, while infrastructure funds rose 50% to ₦242.8 billion. Investments in Real Estate Investment Trusts (REITs) jumped fivefold to ₦77.8 billion.
Analysts note that while private equity and infrastructure offer higher yields, they carry significant risks in Nigeria due to limited bankable projects. However, growing government project financing and investment in energy, technology, and transportation are helping to expand opportunities.
Industry stakeholders believe regulatory reforms will be pivotal in enabling pension funds to safeguard value, enhance returns, and deepen their role in Nigeria’s economic growth.
