By Atoyebi Nike
Pension assets in Nigeria rose to N23.3 trillion in March 2025. This marks a 0.3% increase month-on-month and 18% growth year-on-year. The data was released by the National Pension Commission (PenCom).
The rise was driven by Federal Government of Nigeria (FGN) bonds. Their value increased by N128 billion in March. FGN bonds now make up 59.1% of total pension assets, up from 58.7% the month before.
Corporate debt also added around N20 billion. It now stands at N2.3 trillion and makes up 10.1% of total assets.
The large share of FGN bonds reflects regulatory rules. These rules favour low-risk investments. Investors also prefer fixed income amid high yields.
Despite negative real returns, pension managers are buying long-term bonds. This helps match their future payment obligations. It has led to an inverted yield curve.
Short-term bonds now yield more than long-term ones. For example, the March 2026 bond yields around 21%. But the June 2053 bond yields about 17%. This suggests market concern over short-term risks.
Inflation remains volatile. Analysts say interest rates may stay high for now. A rate cut is unlikely in the near term.
Given the outlook, short-term investments are seen as safer. Treasury bills and 1- to 2-year FGN bonds offer better risk-adjusted returns.
Experts advise a barbell strategy. This combines short-term bonds with a few long-term ones. It offers stable returns and possible capital gains if rates fall later.
