HI’25: Pension funds in FGN securities rise 17.2% to N15.2trn

By Peter Egwuatu

The Pension Fund’s investments in Federal Government of Nigeria (FGN) Securities rose by 17.2% Year-on-Year, YoY, in the first half 2025, H1’25, to N15.2 trillion from N12.960 trillion in the corresponding period of 2024, H1’24.

This was disclosed in the latest pension funds industry portfolio report from the National Pension Commission, PenCom, detailing activities in the sector for the period under review.

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, since 2023.

Notably, due to the rising inflationary trend, the CBN had continuously retained MPR, the bench mark interest rate for government and other corporate securities in the country, at 27.5% since December 2024.

Vanguard’s findings revealed that the FG securities accounted for 61.7 % of the total pension fund assets, which stood at N24. 63trillion at end of H1’25.

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 84.2% of the total FGN securities posting N12.786 trillion, followed by Available for Sale, AFS’s FGN Bonds accounting for 11.2% of the total FGN securities valued at N1.7 trillion. The Treasury Bills occupied the third position recording N624.15 billion and accounted for 4.1% of the total Federal Government securities followed by Sukuk Bonds’ HTM, which recorded N89.638 billion to account for 0.6 % of the total FGN Securities.

Commenting on this development, analyst and Executive Vice Chairman at    Highcap Securities Limited,    David Adonri,    said: “The rise in PFAs’ investments in Government securities in first half was triggered by the high interest rate environment during the period. The CBN in order to tame rising inflation rate has not reduced the MPR since the beginning of the year.”

Also speaking, analyst and Managing Director/CEO of APT Securities and Funds Limited, Mallam Garba Kurfi, said: “The Investment in FGN Bonds by PFAs is necessary because of its availability when compared with the other investment instruments. Also, the less risky nature of the FGN securities make them attractive even when the equities at the moment have recorded higher return on investment.

“The high interest rate environment in 2025, and the government’s increased borrowing to plug the 2024 budget deficit, also drove half year growth in investments in fixed-income securities,” he added.

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