Pension Fund Investment in FG Securities Rise to N15.8 trn
Pension Fund’s investments in Federal Government (FG) securities rose by 18.1% Year-on-Year, YoY, in eight months, ended August 2025 to N15.824 trillion from N13.396 trillion recorded in the corresponding period of 2024.
This was disclosed in the latest pension funds industry portfolio report from the National Pension Commission, PenCom, detailing activities in the sector for the eight months ended August 31, 2025.
Market operators attributed the rise in the investments in FGN securities to the high Monetary Policy Rate, MPR, regime established by the Central Bank of Nigeria, CBN, over the last two years.
It is also attributable to the relatively low risk factor in the FGN securities.
Notably, due to the rising inflationary trend, the CBN had maintained high MPR driving it up to 27.5% before a marginal drop last month to 27%.
MPR is the bench mark interest rate for government and other corporate securities in the country.
The slight reduction in MPR, according to the market operators, was intended to support economic growth while balancing inflation control, following a period of sustained disinflation.
Vanguard’s findings revealed that the Federal Government securities accounted for 61.1% of the total pension fund assets worth N25.895 trillion.
The investments in FGN Securities include FGN Bonds, Treasury Bills, Agency Bonds, Sukuk Bonds and Green Bonds.
In the review period, the Hold Till Maturity, HTM FGN Bonds accounted for 83.9% of the total FGN securities posting N13.284 trillion followed by Available for Sale, AFS’s FGN Bonds accounting for 11.4% of the total FGN securities valued at N1.180 trillion.
The Treasury Bills occupied the third position recording N610.315 billion and accounted for 3.9% of the total Federal Government securities followed by Sukuk Bonds, which recorded N100.8 billion to account for 0.63% of the total FGN Bonds.
Reacting to the development in pension sector, Mallam Garba Kurfi, Managing Director of APT Securities Limited, said: “The Investment in FGN Bonds by PFAs is necessary because of its availability when compared with the other Investment.
Also, the less risky nature of the securities makes it attractive even when the equities at the moment have recorded higher return on investment. The rise in PFAs’ investments in Government securities was also triggered by the high interest rate environment during the period”.