Nigeria’s pension assets to increase by N19trn in 2024, says Agusto

By Cynthia Ezekwe.

Agusto & Co, a pan-African credit rating agency and a leading provider of industry research and knowledge in Nigeria & sub-Saharan Africa has projected that Nigeria’s total pension assets will rise to N19 trillion by the end of 2024.

The rating agency disclosed this in its recent report tagged  “The Nigerian Pension Industry – Unlocking Potential Amidst Economic Uncertainties,” where it noted that Nigeria has the second-largest pension industry in Africa with assets under management (AuM) of N16.1 trillion ($34.9 billion) as at May 31, 2023, representing a 13.5 percent increase from the corresponding period in the prior year.

Agusto pointed out that the 13.5 percent growth was primarily driven by robust investment returns, adding that the pension industry witnessed a notable increase in the number of new contributors, surpassing 300,000 individuals.

The research agency further  commended the National Pension Commission (PenCom) for its commitment to implementing initiatives aimed at bolstering transparency and fostering active engagement in pension schemes.

Going forward, Agusto & Co. says it foresees a 13 per cent  year-on-year growth in the pension industry’s AuM, propelling the total pension assets to an impressive N19 trillion by the end of 2024.

“We envision that this growth will be supported by an anticipated increase in rates on fixed-income securities, specifically bank placements and a continued upswing in the stock market,’’ the report added.

The research company firmly believes that the steady rise in contributions will be driven by robust regulatory oversight and increasing awareness of the micro pension scheme.

However, it pointed out that increased emigration, job losses, and rising inflation may pose a significant risk to its growth projection, and have the potential to impede pension asset growth by delivering negative real returns on investments.