Nigeria’s total pension assets lost a total of N51.3 billion (Ghs 779 million) to stand at N12.25 trillion (Ghs 182 billion) in the month of February 2021. This is according to the monthly pension report released by the Nigerian Pension Commission.
According to data compiled by Nairametrics Research, Nigeria’s pension assets fell to their lowest position in four months, characterized by the decline in bond prices, and profit-taking activities in the Nigerian equity.
- The total pension asset declined by 0.42% from N12.29 trillion recorded as of January 2021 to N12.25 trillion in February 2021.
- Federal Government bonds stood at N7.34 trillion, accounting for 59.6% of the total pension asset under management.
- Also, local money market securities, which stood at N1.62 trillion as of February 2021, accounted for 13.4% of the gross asset for the period under review.
- Mutual funds recorded a decline of 1.3% to stand at N158.96 billion from N162.1 billion recorded in the previous month.
- However, treasury bills increased by 5.5% from N670.34 billion recorded as of the last day of January 2021 to N676.91 billion at the end of February 2021.
A cursory look at the data revealed that the pension asset had reduced by N6.93 billion in the previous month, before losing N51.28 billion in the period under review.
As of February 2021, RSA Fund II accounted for 43.82% of the total pension asset, as it stood at N5.37 trillion, followed by Fund III with N3.16 trillion (25.79%), and CPFAs at N1.47 trillion (11.98%).
Why the decline?
While responding to questions regarding the recent decline in pension fund assets, Oguche Agudah, the CEO of Pension Fund Operators Association of Nigeria (PenOp), stated that it was due to the decline in prices of fixed securities.
- He, however, called on pension contributors to increase their contributions as that would guaranty more funds. He also called on employers in the private and government sector to remit due pension contributions.
- Commenting on the reasons for the loss, Mrs Amaka Andy-Azike, the head of branding and communication of PenOp, stated that the losses are however unrealized losses and would have recovered in the month of March as the yield of government securities continues to trend upward.
- She, therefore, called on pension contributors to be calm as there was no cause for worry. Mrs Amaka also reiterated that the pension scheme prioritises secured investments rather than riskier instruments that could yield higher returns.
- Nairametrics had reported that Nigerian Pension Fund Administrators across the different fund types, dipped significantly in the month of February 2021 as only 22% of the funds recorded positive growth in the month.