The National Pension Commission (PenCom) has disclosed that the Assets Under Management (AuM) of the regulated pension industry increased by 23 per cent year-on-year to N25.9 trillion as of August 2025.
This was contained in the latest monthly update by the regulator, which indicated that the pension industry has remained resilient amid prevailing macroeconomic challenges.
This was supported by sustained growth in pension contributions and consistent investment returns across asset classes.
However, despite the industry’s impressive performance, it remains significantly underpenetrated. On a standardised basis, the total pension assets account for only about 7.1 per cent of Nigeria’s 2024 gross domestic product (GDP).
According to PenCom, the strong year-on-year growth was primarily driven by sustained investment in FGN securities, which was supported by the elevated interest environment. Their value grew by 17 per cent year-on-year or N2.3 trillion to N15.7 trillion.
Within this segment, FGN bonds were the primary driver of growth, accounting for a substantial share of -85 per cent of the total FGN securities. Investment in FGN bonds increased by 5 per cent year-on-year to N13.3 trillion.
The Nigerian stock market also contributed to the impressive year-on-year performance, with pension fund holdings in equity investments rising sharply by 86 per cent per cent year-on-year or N1.7 trillion to reach N3.6 trillion.
In August, the NGX ASI advanced by 0.31 per cent month-on-month, and it has delivered an impressive year-to-date return of 45.68 per cent.
The bullish sentiment in the local bourse market was fuelled by strong investor appetite for bellwether stocks, supported by improved macroeconomic conditions and strong corporate earnings.
The performance of the money market asset class improved significantly compared with the previous year, with total pension assets in money market instruments rising by 15 per cent year-on-year to N2.4 trillion.
In contrast, corporate debt declined slightly by 1 per cent year-on-year or N22.1 billion to N2.2 trillion. The slowdown in corporate issues during the year was due to the high-interest-rate environment, driven by the monetary tightening stance of the Central Bank of Nigeria (CBN).
The Monetary Policy Committee’s (MPC) 50 basis-point cut in September signals the beginning of a potential easing cycle, which could lower borrowing costs and improve market conditions for debt financing.
The latest inflation data from the National Bureau of Statistics (NBS) also showed a sixth moderating cycle to 18.02 per cent in September 2025, further boosting support for more when the committee meets in November.