PFAs Invest N300bn in Dangote Refinery, N127bn in Sukuku, Eyes Dollar Instruments 

Ebere Nwoji

Pension Fund Administrators (PFAs) in the country have said that they invested heavily in Dangote Refinery through the N300 billion bill bonds issued by Dangote industries in 2022 for the completion of the refinery.

The operators also said they invested N127 billion in Sukuku projects in various states and are currently requesting for access to invest in dollar instruments as stated by regulations for Pension Fund Administrators (PFAs), to cushion the effects of inflation.

The investments, they added, will also guarantee handsome returns on investment to retirees and workers whose savings are invested in various instruments.

The Managing Director Pension Alliance (PAL) PFA Limited, Sa’ ad Jijji, disclosed this  at the fourth National Assembly Retreat 2024 organised by the Pension Fund Operators Association of  Nigeria (PenOp) in Lagos.

Jijji lamented that lack of access to foreign exchange investment even though investment  regulations allowed PFAs to invest in dollar instruments was  one of the big challenges confronting pension fund operators in their efforts to manage retirees’ funds in most profitable way.

He said the sector suffered limited viable investment opportunities leading to below inflation returns.

He said aside investment in federal government bonds in which larger chunk of the N19.67 trillion pension assets is invested and Dangote refinery, a total of N127 billion pension fund was also invested in Sukuku specifically in Kano – Maiduguri Express, Kaduna Eastern bypass, Enugu -PH Express, Ibadan -Ilorin Express, Ahmadu Bello way Victoria Island Lagos, and Loyola -Oweto Bridge.

He spoke on other infrastructural investment made with pension fund saying, “PFAs have invested in ACTIS Real Estate Fund that has acquired Jambi Lake Mall and will acquire Ikeja City Mall.”

He further said about 103 billion was invested in NIDF the largest infrastructure fund in Nigeria that invests in projects from power to student hostels.

Speaking on pension industry assets under management, Jijji said between 2018 and 2023, the pension industry achieved average annual growth of 16.3 per cent to N18.36 trillion.

According to him, by March 2024, pension assets under management has grown by 7.14 per cent to N19 .67 trillion.

“In dollar terms, value of total pension assets dropped from $33 billion (2019@N306/$) to $15 billion (2024@N1309/$). Funds 11 and 111 accounted for 42.4 per cent and 26.3 per cent of the total Pension industry assets as at March 2024,” he informed.

Earlier in his address, the Chairman House Representatives Committee on Pension,  Hussaini Mohammed Jallo, noted that the PFAs were licensed under  the Pension Reform Act 2014 to carry out duties such as open retirement savings account for all employees with a personal identity number among other functions but were faced with several challenges.

He listed these challenges as funding deficit, investment returns under the influence of volatile markets and low interest rates as well as inefficient administrative processes leading to delays and errors and increased costs.

He listed other challenges as regulatory compliance, data management and security technology and digitalisation among others adding that addressing these issues is crucial to ensure the long term sustainability and effectiveness of pension fund administration and ultimately protecting the retirement security of beneficiaries.

Also speaking the Chief Executive Officer, PenOp, Oguche Agudah, said in organising the retreat, PenOp wanted to be able to network with members of the legislature and engage on the germane issues. 

“We want to enable you to see into our operation and see how we can work together to make the pension system better for the benefit of everyone. 

“We want to enlighten you in order to make your job better and make your job easier.  Some of you might have been working in formal employment before you were elected into office, so you have your pensions. Perhaps you were contributing and your employer was not, or you have not been able to access your benefits. Whichever side you might have been, we want to use this opportunity to delve into the intricacies of the contributory pension scheme in order to make your job easier,” Agudah stated. 

According to him, this will help the law makers better understand the issues at play when it is brought in front of them.

“At this retreat, we have gone a plethora of subject matter of experts who will take us through various aspects of the contributory pension scheme. A number of the chief executive officers of pension fund operators will give us presentations and take us through various aspects of the pension industry. For example – The investment of pension funds, which has generated a lot of discussion in a public space recently. Or the benefit payment system. Why do people retire and not get paid. We will delve into that. Or Accrued Rights- what does that word mean? Or how is the state pension system different from the federal pension system? We will go through all of this and more today, and I want to urge all the honourable members and distinguished senators to please engage the process and listen as much as possible,” Agudah stated.

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