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The Coronation Asset Management has said Nigeria can make use of domestic pensions rather than global debt for national development.
It also said the country can unlock sustainable growth by leveraging its risk-managed long-term funds.
It said this in a report titled ‘Unlocking Nigeria’s $33.4bn pensions pot for growth’.
The report said, “As of March 2022, the assets under management of the Nigerian pensions fund industry were valued at the equivalent of $33.4bn. Representing 19 per cent of the Nigerian GDP, these funds, correctly invested and deployed, present an opportunity for the country to address its $100bn annual infrastructure shortfall.”
Despite recent Nigerian legislation revising pension fund allocation to allow a broader range of investments, it stated, Nigerian pension fund administrators continued to make only limited allocations to infrastructure funds.
Even with combined private equity and real estate investments, recent allocations to infrastructure hover between 1.5 per cent to 2.1 per cent of assets under management, it added.
By contrast, it said, Pension Fund Administrators in Australia, Canada, Japan, Netherlands, Switzerland, the United Kingdom, and the United Sates allocated excess of 26 per cent of funds to real estate, private equity and infrastructure.
The report said, “A combination of poorly understood regulation, limited knowledge of alternative assets, and the perceived risk-free returns offered by fixed income investments have kept Nigerian pension fund administrators away from alternatives in general, and infrastructure in particular.
“To date, the allocation of pensions investment to fixed income instruments (issued by Nigeria’s federal and state governments) has averaged 67 per cent over the last 10 years, in line with government borrowing supported by monetary policy decisions in a volatile environment.
“Just as historically, the sizeable allocation to government instruments was regulatory driven, so too is the recent introduction of a multi-fund structure, a welcome legislative attempt to redress the concentration of fixed income investment in government securities.”
At the event, it added, a question-and-answer panel session would feature big names in the marketing communications industry such as the Marketing Director, Seven Up, Mr Norden Thurston; Managing Director, TBWA, Mr Kelechi Nwosu and Partner, Imaginarium, Mr Jay Chukwuemeka.
The statement said the second day would be devoted to the induction and presentation of certificates to new members, presentation of the report of tenure by AAAN President, Mr Steve Babaeko; Agency business, formal adoption of the association’s new constitution, dissolution of the executive board, election and the awards/gala night.
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