By Sola Alabadan
Determined to make meaningful contributions to the nation’s economy,the Pension Fund Administrators (PFAs) in Nigeria, intend to invest in impact focused funds going forward.
The Chief Executive Officer of Pension Funds Operators Association of Nigeria (PenOp), Oguche Agudah, who stated this during a webinar organised by the association on Thursday, pointed out that while the pension managers are keen to contribute their quota to the nation’s growth and development, “transparency and structure are key.”
The theme of the webinar was: “The Nigerian Economic and an Investment Outlook: A focus on Pension Fund Investment Strategies”
Agudah also informed that 42 percent of the PFAs have indicated that they were actively looking for investments in infrastructure, while another 50 per cent said they would be considering investments along that line of business in the current year 2023.
He said: “Although fund managers are cautious about private equity, they will consider on a deal by deal basis. Twenty five per cent of fund managers polled are actively looking to invest in private equity, while 67 percent say they will consider it.
“Fund managers are looking to invest in impact focused funds but transparency and structure are key.”
With regards to the various dealings in equities and securities, he said there was reduction in engagement with equities in the previous year from 7.73 percent in 2021 to 6.79 percent in 2022.
The PenOp CEO added that the government securities as share of portfolio decreased by 118 basis points to 65.44 percent, while there was also reduction in interaction with money market securities which reduced by 1.92 percent.
In a similar vein, the Chief Economist at Africa Finance Corporation (AFC), Mrs. Rita Babihuga-Nsanze, advised the the incoming government to cancel the oil subsidy policy in the country, among other things, in order to put the economy on the right path.
Other issues she stated that the incoming government must address include the security in oil sector corridor, as well as to enthrone the expected reform in forex market.
Without the necessary structural reforms, the current forex liquidity pressure would persist in 2023 and potentially in 2024 on the back of increasing downward pressure on foreign reserves, she further emphasised.