“Beyond Bonds: Pension Funds Must Drive Nigeria’s Economic Growth”

“Let Workers’ Pensions Build the Economy That Will Sustain Their Retirement.”

Nigeria’s pension industry has crossed the N23 trillion milestone, but the big question remains, are workers’ savings truly building the future they deserve?

Latest data from the National Pension Commission (PenCom) show that by March 2025, Pension Fund Administrators (PFAs) had channelled a massive N14.48 trillion, or 62.09% of total pension assets, into Federal Government securities. While this strategy provides security, it leaves just 38% of the pool available for investments that can directly stimulate the nation’s economic ecosystem, such as infrastructure, manufacturing, housing, and technology-driven enterprises.

Over the past six quarters, pension managers have grown their exposure to government paper by N3.62 trillion, a 33.3% increase. Government bonds alone rose from N10.40 trillion in June 2023 to N13.79 trillion in March 2025, while treasury bills surged by more than 208%, from N192.4 billion to N593.2 billion. Yet, the funds remain largely tied to plugging fiscal deficits rather than fueling growth.

Experts warn that while bonds provide guaranteed returns, they cannot deliver the stability and resilience that only broad-based economic growth can achieve. “Government securities are safe, but safety without growth is not sustainable,” one analyst explained. “Real stability comes when retirement savings help build roads, power plants, schools, and industries that drive productivity.”

Across the globe, successful pension systems show the way. The Canada Pension Plan Investment Board has billions invested in infrastructure and private equity. In Chile, pension assets have funded housing and transport projects, while in South Africa, regulated frameworks are steering pensions into renewable energy and logistics. These models prove that it is possible to protect retirees while also driving development.

Nigeria’s economy is in dire need of similar thinking. With an infrastructure gap estimated at over $100 billion, redirecting even a fraction of pension funds could unlock opportunities in transport, energy, healthcare, and agriculture, sectors that create jobs and multiply value across the economy.

Labour leaders have also joined the call for reform. “Workers’ pensions should not serve only as government lifelines,” one union representative stressed. “They should be a tool for nation-building, securing the retiree’s future while building an economy that can sustain that retirement.”

The reflection is clear: Nigeria cannot build a trillion-dollar economy if pension funds remain locked in government debt.

Call to Action:

It is time for PenCom to set clear, forward-looking guidelines that mandate PFAs to balance safety with development. Such policies should direct a measurable portion of pension assets into infrastructure, housing, and industrial growth, sectors that not only strengthen the economy but also ensure retirees enjoy the benefits of a thriving, inclusive system. Workers’ savings must do more than sit in bonds; they must build the future.