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Monday, March 20, 2023

Nigerian Pension Assets Growth Falls to 9-Months Low in December

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The total assets under management (AuM) by Nigerian pension funds administrators (PFAs) fell to the lowest level since the beginning of the coronavirus lockdowns in March 2020, according to MoneyCentral’s analysis of the regulator PENCOMs latest data on the industry.

Total AuM for the industry increased by a mere 0.01 percent month on month (m/m), between November and December 2020 (See Chart).

That’s the slowest rate of growth since March 2020, when pension assets fell by -1.72 percent as firms laid off workers and contributors pulled out funds to shore up their living expenses amid the coronavirus lockdowns.

Total PFA assets were equivalent to N12.292 trillion in December, compared to N12.291 trillion in November 2020.

PFA assets grew the most (m/m) in October 2020, when it rose by 4.2 percent to N12.05 trillion, compared to N11.567 trillion in September.

Looking at the overall portfolio, total assets invested in FGN Securities by PFAs fell to N8.130 trillion in December, from N8.139 trillion in November, while exposure to local money market securities also fell by 5.91 percent to N1.687 trillion from N1.793 trillion in November.

Pension assets allocated to domestic equities however increased month on month to N858.46 billion in December, from N790.85 billion in the previous month while investments in corporate debt investments rose to N836.3 billion, from N731.57 billion.

MoneyCentral in a comprehensive story published on Monday detailed how lackluster leadership at PENCOM is frittering away the gains the Nigerian pensions industry has made over the past decade.

The slowdown in growth seems to confirm our thesis.

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