FGN Securities sees 16.7% surge, swelling pension fund assets to N28 trillion

Nigeria's pension industry has experienced a substantial surge in Net Asset Value, with a notable 24.6% increase, largely driven by the rising yields on investments in Federal Government of Nigeria securities, as revealed by data from the National Pension Commission.

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The latest report from the National Pension Commission indicates a significant Year-on-Year rise in total Assets under Management, reaching N28.04 trillion in January 2026, up from N22.51 trillion in January 2025.

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Pension funds' investment in Federal Government of Nigeria securities also saw a considerable 16.7% Year-on-Year growth, reaching N16.695 trillion in January 2026, compared to N14.309 trillion in January 2025.

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The FGN Bonds have been a key driver of asset concentration in government securities, accounting for approximately 59.5% of the total pension assets.

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According to the National Pension Commission, the predominant proportion of government securities in the overall Assets under Management portfolio can be primarily attributed to regulatory limits on investments imposed by the Commission.

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The renewed interest in government assets is further exemplified by the 12.6% Year-on-Year increase in pension holdings in treasury bills, which rose to N894.1 billion from N794.3 billion in January 2025.

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In contrast, Sukuk Bonds, comprising Hold Till Maturity and Available for Sale, declined by 9.2% Year-on-Year to N85.02 billion from N93.7 billion in December 2024.

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Analysts at InvestData Consulting Limited noted that the high interest rate environment in 2025, coupled with the government's increased borrowing to address the 2025 budget deficit, contributed to the Year-on-Year growth in investments in fixed-income securities.

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David Adonri, analyst and Executive Vice Chairman at Highcap Securities Limited, commented that the demand for government securities is driven by their reputation as safe-haven assets, high liquidity, attractive yields, and increased participation from both institutional and retail investors.

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Adonri further stated that as pension funds grow in size, a larger proportion of their investments will naturally flow into Federal Government of Nigeria securities, a trend expected to continue due to the investment guidelines set by the National Pension Commission, which mandate Pension Fund Administrators to allocate a significant portion of their funds to Federal Government of Nigeria securities.