The National Pension Commission of Nigeria (www.pencom.gov.ng) regulates over N2 trillion ($12.8 billion) in assets under management. This has been accumulated from 4.7 million people who have opened Retirement Savings Accounts and other pensions since the Pension Reform Act 2004. The assets are up from N1.8 trillion at July 2010 and the rate of contribution is increasing each year.
Africa’s domestic savings institutions are growing fast in many countries. In some capital markets they are growing faster than the demand for capital, the issuing of new shares, bonds and other investments, and they are mopping up available liquidity in the securities markets.
Mr. Muhammad K. Ahmad, Director General of PenCom, gave the figure at the opening of a two-day workshop jointly organized by PenCom and Organisation of Pension Supervisors (IOPS) on 5 May, according to a report in Daily Trust newspaper.
Pencom is the apex authority in the pension industry responsible for regulating and supervising. The website says it aims “to be a world-class organisation that ensures the prompt payment of retirement benefits and promotes a sustainable pension industry that positively impacts on the economic development of Nigeria”. Its regulatory and supervisory activities are risk-based and consultative.
Mr Ahmad explained that pensions are long-term investments which he said are available for “investment, infrastructure and other related investment outlet”, according to the newspaper.
He also talked about capacity building which is a challenge for any industry. It is a continuous process: “We need to change the way we supervise our regulative entities to focus on those areas that form the greatest risk” in order to focus Pencom’s resources. They also want “to clearly understand and identify early warning signals so that we can take appropriate actions.”
In another news report in April, Mr Ahmad said the number of contributors to the scheme is far less than expected given that there are an estimated 42 mn workers. He also said there is only a slow rate of growth in the number of contributors due to: lack of awareness and enlightenment for would-be contributors; poor compliance from the private and informal sectors; and the fact that the scheme is not implemented in some States.