The National Pension Commission (PenCom) has said that it is targeting about N2.3 trillion representing 40 percent of the N5.8 trillion Pension fund assets on infrastructure development by 2019.
The Pension regulatory body also said that out of the over N1.16trillion pension fund assets available for investment in infrastructure, about N1bn had so far been invested in infrastructure bonds, leaving about N1.159trillion idle and not possible to be invested in the provision of the much needed infrastructural projects in the country.
The Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, dropped this figure during a presentation at the 2016 third quarter Annual Finance Correspondents Association of Nigeria(FICAN) forum in Abuja on the need to invest pension funds to meet Nigeria’s infrastructural development.
The Director- General who was represented at the forum by Mr. Ehimeme Ohioma , Head, Investment Supervision Department of the Commission said while the regulations allowed for investment of pension fund assets in infrastructure through infrastructure bonds, the commission is yet to locate viable instruments through which to push the funds.
Mr. Ohioma identified the problem as largely due to unavailable investment instruments that qualify for pension investment as stipulated in the investment regulations issued by the commission.
Other challenges, according to Ohioma, include but not limited to the huge dearth of alternative asset products in the Nigerian financial markets, Liquidity risk, as pension funds prefer low or no risk products, that are able to generate steady income from the onset, policy inconsistencies on the part of government apart from consistently higher yields offered on FGN fixed income instruments which had crowded out alternative assets.