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The Nigerian pension industry is unlocking its full potential to emerge as a key player in driving economic growth, according to a pension report by Agusto & Co. The growth has been fuelled by robust investment returns.
The Nigerian pension industry is unlocking its full potential to emerge as a key player in driving economic growth, according to a pension report by Agusto & Co. The growth has been fuelled by robust investment returns.
The report states that Nigeria has the second largest pension industry in Africa with assets under management (AUM) of N16.1 trillion (US$34.9 billion) as of May 31, 2023, representing a 13.5 per cent increase from the corresponding period last year. It added that the upswing in the number of enrollees can be attributed to the commendable rise in compliance levels across both the private and public sectors coupled with the intensified marketing activities undertaken by pension fund administrators (PFAs).
The report also noted that a significant informal sector (estimated at 65 per cent of GDP), an elevated inflation rate of 22.41per cent, a high poverty rate of 40 per cent and restricted investment options afforded by the Nigerian capital market continues to restrain the expansion of the industry. The report further revealed that as at the end of 2022, there were 19 licensed PFAs with AUM over ₦11.9 trillion in Nigeria. Agusto &Co noted that 67 per cent of the majority industry’s assets are under the management of the top five players in the industry, with the players collectively grasping a 56 per cent share of the Industry’s enrollee base.
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The company foresees a 13 per cent year-on-year growth in the pension industry’s AuM, propelling the total pension assets to an impressive ₦19 trillion by the end of 2024.
