High interest rate, FG borrowings drive rise in pension investments
Pension Assets in Nigerian Government Securities Grow by 17.5%
By Peter Egwuatu
Pension assets invested in Nigeria’s Federal Government (FG) debt securities increased by 17.5% year-on-year, rising to ₦17.479 trillion in May 2026 from ₦14.468 trillion in May 2025, according to data released by the National Pension Commission (PenCom).
Financial analysts attribute this rise to a high-interest environment in the financial market alongside sustained borrowing by the Federal Government.
The total net asset value of pension funds also saw a significant increase, climbing 27.1% year-on-year to ₦31.322 trillion in May 2026, up from ₦24.654 trillion during the same period in the previous year. This growth reflects the rising yields associated with FGN securities.
Data from PenCom reveals that FGN Bonds accounted for 55.8% of total pension assets as of May 2026. The prominent share of government securities in the overall assets under management (AuM) is primarily due to regulatory limits imposed by PenCom on investments.
Further illustrating the renewed interest in government assets, pension investments in treasury bills surged by 86.9% year-on-year, totaling ₦1.131 trillion, compared to ₦604.587 billion in May 2025.
Conversely, investments in Sukuk Bonds, which include Hold Till Maturity (HTM) and Available for Sale (AFS), experienced a slight decline year-on-year, falling to ₦92.589 billion from ₦94.894 billion in May 2025.
Analysts at InvestData Consulting Limited remarked that the high and stable interest rates alongside the government’s increased borrowing to address the 2025 budget deficit were significant factors driving annual growth.
David Adonri, Executive Vice Chairman of Highcap Securities Limited, noted that the demand for government securities stems from their status as safe-haven assets with high liquidity and attractive yields relative to other low-risk investment options. He added that as the size of pension funds expands, a larger portion of their investments is likely to flow toward FGN securities.
