“$33.4 billion in pension funds will bolster infrastructure and sustain growth”

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Coronation Asset Management has said Nigeria can use domestic pensions instead of global debt for national development.

It also said the country can unlock sustainable growth by leveraging its risk-managed long-term funds.

This was stated in a report titled “Unlocking Nigeria’s $33.4bn pensions pot for growth”.

The report states: “As of March 2022, the Nigerian pension fund industry was valued at the equivalent of $33.4 billion in assets under management. These funds, which represent 19 percent of Nigeria’s GDP, if invested and used properly, represent an opportunity for the country to address its $100 billion annual infrastructure deficit.”

Despite recent Nigerian legislation revising pension fund allocations to allow for a broader range of investments, Nigerian pension fund managers continued to provide limited allocations to infrastructure funds.

Even for combined private equity and real estate investments, recent allocations to infrastructure have fluctuated between 1.5 percent and 2.1 percent of assets under management, he added.

In contrast, pension fund managers in Australia, Canada, Japan, the Netherlands, Switzerland, the United Kingdom and the United States allocated over 26 percent of funds to real estate, private equity and infrastructure.

The report states: “A combination of poorly understood regulation, limited knowledge of alternative investments and the perceived risk-free returns that fixed income investments offer has kept Nigerian pension fund managers away from alternatives in general and infrastructure in particular.

“To date, the allocation of fixed income investments (issued by Nigeria’s federal and state governments) to fixed income instruments (issued by Nigeria’s federal and state governments) has averaged 67 percent over the past 10 years, in line with government borrowing supported by monetary policy decisions in a volatile environment.

“As in the past, the significant allocation to government bonds was driven by regulation, so is the recent introduction of a multi-fund structure, a welcome legislative attempt to correct fixed income concentrations in government bonds.”

The event, she added, would feature a question-and-answer panel session featuring big names in the marketing communications industry such as Seven Up’s marketing director, Mr. Norden Thurston; Managing Director, TBWA, Mr. Kelechi Nwosu and Partners, Imaginarium, Mr. Jay Chukwuemeka.

The statement said that the second day of induction and awarding of certificates to new members was dedicated to the presentation of the tenure report by AAAN President, Mr. Steve Babaeko; Agency business, formal adoption of the new association statutes, dissolution of the board, election and award ceremony/gala evening.

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