By David Akinmola
Nigeria’s pension fund assets, now exceeding N20 trillion, could become a major catalyst in closing the country’s estimated 20 to 28 million housing deficit, industry experts have said.
Latest data from the National Pension Commission (PenCom) show that total net pension assets crossed the N20 trillion threshold as of late 2025, reinforcing the sector’s position as one of the largest pools of long-term domestic capital in the economy.
Analysts argue that redirecting even a small portion of these funds into carefully structured housing finance instruments could unlock large-scale affordable home development without undermining contributors’ savings.
Currently, less than three per cent of total pension assets are invested in real estate-related instruments, with the bulk allocated to Federal Government securities, money market instruments and equities. However, housing advocates say pension funds are structurally suited to long-term projects such as mortgage-backed securities, housing infrastructure bonds and real estate investment trusts.
“If just five per cent of pension assets — roughly N1 trillion — were channelled into well-structured housing instruments, it could finance hundreds of thousands of homes. The key is structuring the risk properly,” said Lagos-based macroeconomic analyst, Lanre Bakare.
Developers maintain that access to affordable, long-tenor financing remains the biggest obstacle to scaling housing supply, particularly with commercial lending rates above 25 per cent.
“Land and materials are expensive, but financing is the real bottleneck. We borrow at double-digit rates, which automatically push up house prices beyond affordability for most Nigerians,” said Simeon Kemakolam, Chief Executive Officer of Grand Spaces Architects Limited.
Theodore Omokpo, Chief Executive of Dornesi Projects, noted that with appropriate guarantees and governance safeguards, pension assets could safely support large-scale housing delivery without exposing contributors to undue risk.
Gloria Ojei, an Abuja-based estate developer, added that pension funds’ long investment horizon makes them well aligned with 15- to 25-year housing projects.
Nigeria’s mortgage market remains one of the shallowest globally, with a mortgage-to-GDP ratio of about 0.5 per cent, significantly below peer African economies. High interest rates, short loan tenors and limited refinancing mechanisms have constrained mortgage growth, while funding from the Federal Mortgage Bank of Nigeria has fallen short of national demand.
Economists say unlocking pension capital for housing could generate broader macroeconomic gains. The construction sector has one of the highest employment multipliers in the economy, stimulating demand for cement, steel, paints, tiles and other building materials, while boosting small and medium-sized enterprises linked to the value chain.
“Every 100,000 housing units built could create hundreds of thousands of direct and indirect jobs; it is a growth engine,” said development economist, Dr. Afolabi Yusuf.
However, labour groups and pension contributors have urged caution, stressing that retirement savings must not be exposed to poorly structured projects.
“We cannot risk pensioners’ money on inadequately designed investments,” said Emeka Okoye, a civil servant and pension contributor.
With rapid urbanisation and annual population growth exceeding 2.5 per cent continuing to widen Nigeria’s housing gap, stakeholders say pension capital remains one of the few viable domestic funding sources capable of transforming the housing landscape — provided strong governance, risk management and liquidity safeguards are firmly maintained.
