Nigeria: PenCom Prioritises Infrastructure, Housing in Pension Fund Investments

The National Pension Commission (PenCom) has initiated moves to prioritise investment of pension funds in infrastructure and housing to reduce the negative impact of COVID-19 on pension assets in the country.

The acting Director General of PenCom, Aisha Umar-Dahir, told Daily Trust that the commission had started engaging stakeholders on how to hedge pension assets from the negative impact of the COVID-19 pandemic on the volatile market.

Umar-Dahir said, "The commission is desirous of encouraging pension fund investments in infrastructure and housing without compromising the major objectives of pension fund investments, which are safety of the assets and maintenance of fair returns on investments."

She said the commission and industry stakeholders were making effort to further diversify the investment portfolio of pension assets and deepen investment channels with particular focus on pension fund investments in infrastructure and housing.

The PenCom boss said, "The COVID-19 pandemic has affected the Nigerian economy and has resulted in its slowdown and decrease in asset prices. This is an opportunity for pension funds, which have long-term investment objectives and are expected to take advantage of the low prices in the stock market, to achieve the long-term objective of fair returns to contributions."

According to her, there are broad-based stakeholder engagements with focus on development of capital market products, including hedging tools, which will serve as buffer to safeguard pension assets, especially during volatile periods such as the current COVID-19 pandemic.

She stressed that the commission's plan was to accelerate ongoing effort with respect to engagement with stakeholders (government agencies, private sector participants and multilateral development financial organisations) in developing infrastructure and housing assets that meet requirements for pension fund investment.

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