Nigeria pension AuM in 13% YoY growth projection to N19trn by 2024

By Cynthia Ezekwe.

Assets under Management (AuM) in Nigeria’s pension industry ecosystem are projected to jump 13 percent year-on-year to N19 trillion by the end of 2024, according to Nigeria headquartered pan-African leading credit rating agency, Agusto & Co.

The projections are contained in a recent report titled, “The Nigerian Pension Industry – Unlocking Potential Amidst Economic Uncertainties,” produced by Agusto & Co, the leading provider of industry research and knowledge in Nigeria & sub-Saharan Africa.

The report acknowledged that Nigeria currently has the second-largest pension industry in Africa with 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 percent  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,’’ it added..

The credit rating agency 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 warned 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.