By David Akinmola
Nigeria’s pension fund assets rose to an all-time high of N23.56 trillion as of April 2025, reflecting sustained growth in the Contributory Pension Scheme (CPS) and increased investor confidence in pension fund management. But where is all that money going?
According to the latest data released by the National Pension Commission (PenCom), the bulk of the pension assets — nearly 65% — remains invested in Federal Government securities, signaling a conservative approach to safeguarding retirees’ funds amid ongoing economic uncertainty.
Specifically, N15.3 trillion was allocated to Federal Government bonds, Treasury Bills, and Sukuk instruments, which pension administrators say provide safety, liquidity, and steady returns in a volatile market.
Corporate debt instruments accounted for N1.8 trillion, while investments in domestic ordinary shares stood at N1.4 trillion, reflecting cautious optimism toward the equities market despite its recent rebounds. PFA (Pension Fund Administrators) exposure to the Nigerian Stock Exchange remains modest as many operators prioritize capital preservation.
Another N2.1 trillion was invested in money market instruments such as fixed deposits and commercial papers, helping PFAs manage short-term liquidity needs while taking advantage of rising interest rates.
Surprisingly, infrastructure funds — long touted as a tool for bridging Nigeria’s massive infrastructure gap — received only N128 billion, just 0.54% of the total assets under management. Analysts say concerns over regulatory bottlenecks, credit risk, and lack of viable, de-risked infrastructure projects continue to limit pension fund deployment into this space.
Real estate investments stood at N272 billion, while private equity and mutual funds accounted for a combined N209 billion, revealing modest growth in alternative asset allocations.
Reacting to the figures, PenCom reiterated its commitment to safeguarding contributors’ funds through prudent and diversified investment strategies, while also pushing for gradual expansion into growth sectors like infrastructure, housing, and technology.
“We are focused on balancing safety with returns,” a PenCom spokesperson said. “Our goal is to ensure that contributors have both peace of mind today and sustainable income in retirement.”
Despite the growth, stakeholders have renewed calls for reforms that would allow more dynamic pension fund utilization, especially in critical areas like infrastructure, mortgage financing, and SMEs, without compromising safety and liquidity.
“With over N23 trillion now sitting in pension assets, there is a clear opportunity to transform Nigeria’s economy if the right frameworks are put in place,” said Bala Yusuf, a pension expert and financial analyst. “But PFAs need confidence, incentives, and protection to move beyond government securities.”
As the CPS continues to grow in both contributors and assets, the big question remains: how best can Nigeria channel this pool of long-term capital to drive inclusive economic growth — while ensuring every retiree receives the benefits they’ve worked for?
