The 2025 Nigerian Pension Industry Report (the Report) delivers a comprehensive and incisive analysis of the evolution, current dynamics and future prospects of Nigeria’s pension industry (the Industry). The Report traces the Industry’s origins and regulatory milestones, highlighting its transformation into the country’s largest institutional investor and a cornerstone of long-term financial stability.
In 2024, pension assets surged to ₦22.51 trillion, reflecting a robust 22.6% annual growth and a five-year compound annual growth rate (CAGR) of 13%. This expansion was primarily underpinned by strong investment returns and steady net contributions. We estimate that the Industry’s assets under management (AuM) would surpass ₦29.3 trillion by the end of 2025, driven by sustained yields in money market securities and ongoing regulatory reforms.
Despite the robust growth in AuM, the Industry’s investment strategies remain predominantly conservative, with over 62.7% of assets allocated to Federal Government of Nigeria (FGN) securities. While there are nascent moves toward diversification – such as increased exposure to corporate debt, equities and alternative assets – the investment landscape narrowed in 2024 due to higher borrowing costs and stricter credit standards, reinforcing the Industry’s sustained preference for sovereign securities as the dominant asset class.
A critical challenge persists in the limited coverage of the pension system, particularly within the informal sector, which constitutes approximately 93% of Nigeria’s workforce as at Q2 20241. The Micro Pension Plan (MPP), designed to extend retirement benefits to self-employed and informal sector workers, recorded a 51% increase in enrolment to 172,936 participants by the end of 2024. However, only 6% of these accounts were funded, emphasising the need for more effective engagement and financial inclusion strategies.
The Industry also contends with the persistent issue of negative real returns. In 2024, the average inflation of 33.18% significantly outpaced the nominal returns of 17.05% across the Industry’s Fund II, eroding the real value of retirement savings and posing a substantial risk to long-term retirement security.
Despite these challenges, the Industry is poised for continued growth. Expanding participation in the informal sector, addressing the challenge of negative real returns, enhancing operational efficiency and regulatory innovation will be pivotal to sustaining growth. Strategic initiatives such as the Micro Pension Scheme and ongoing regulatory reforms are expected to drive broader coverage and strengthen the Industry’s resilience.
This report provides a detailed analysis of the Nigerian Pension Industry (“the Industry”). Key benefits of the report include:
We believe the information, analyses and opinions contained in this Industry report will be of utmost importance to various stakeholders, including:
