Nigerian PFAs invest N184.47 billion in FGN securities

• Nigerian PFAs invest N184.47 billion in FGN securities
• Summary of the report

In the third quarter of 2022, Nigerian Pension Fund Administrators (PFAs) increased their holdings in federal government securities by N184.47 billion, down from N505.81 billion in the previous quarter. Data from the National Pension Commission support this (PENCOM).

The pension industry increased its holdings of federal government securities from N9.01 trillion at the end of June 2022 to N9.19 trillion as of September 2022. Between January and September 2022, this takes the total investments in FGN securities to N418.7 billion.

Additionally, the total pension asset under management increased by N156.74 billion over the previous three months, from N14.27 trillion to N14.42 trillion by the end of September 2022.

Particularly, federal government bond investments climbed by N490.66 billion during the period under review, reaching N8.8 trillion as of the end of September 2022 from N8.31 trillion recorded as of June 2022. In the meantime, exposure to government treasury notes decreased from N475.6 billion in August to N185.87 billion in September.

64% of the total assets under control were invested in securities issued by the federal government. This is large because pension investments in Nigeria are cautious. Due to the high level of regulation in the Nigerian pension industry, the majority of pension assets must be invested in federal government securities.

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Compared to other variable assets, government securities are viewed as safe-haven investments since they carry no risk of capital loss. especially in light of the fact that pension administrators use public funds.

Summary of the report

Between June and September 2022, investments in corporate debt securities increased dramatically by 25.03% to N1.49 trillion. On the other hand, PFAs decreased their real estate holdings by 2.9% from the N236.2 billion reported at the start of the quarter to N229.37 billion as of September 2022.

With N6.29 trillion, or 43.6% of all pension funds, RSA Fund II continues to make up the majority of the fund contribution, followed by RSA Fund III with N3.95 trillion, or 27.4% of all assets. Current systems made up 10% of the total funds, which fell to N1.43 trillion in Q3 2022 after losing N1.59 billion. The CPFAs, which as of the review period totaled N1.49 trillion, constituted 10.3% of the total funds.

Further analysis revealed that a total of N12.77 billion, N127.59 billion, and N61.64 billion were invested in agency bonds, Sukuk bonds, and green bonds, respectively. As of September 2022, the total amount invested in state government securities was N166.51 billion.