PenCom plans infrastructure fund to unlock Nigeria’s $22bn pension assets

By Olamide Akintunde

The National Pension Commission (PenCom) is developing a new investment vehicle that could channel resources from Nigeria’s $22 billion pension industry into critical infrastructure projects, as the Federal Government seeks to mobilise long-term domestic capital to finance roads, railways, power, healthcare and other strategic assets.

The proposed initiative, expected to be launched later this year, is aimed at creating a structured platform through which pension funds can invest in commercially viable infrastructure projects while safeguarding contributors’ retirement savings.

PenCom spokesperson Ibrahim Buwai disclosed the plan, saying the commission is exploring mechanisms to unlock pension assets for national development without compromising the industry’s core objective of delivering sustainable returns to contributors.

PenCom regulates Nigeria’s Contributory Pension Scheme (CPS), overseeing Pension Fund Administrators (PFAs), protecting retirement savings and ensuring pension assets are invested prudently.

According to Buwai, PenCom is encouraging the establishment of a special-purpose investment vehicle (SPV) that would allow pension assets managed by different PFAs to be pooled for financing bankable infrastructure projects.

“We are encouraging the setting up of a vehicle, kind of special-purpose vehicle, where resources can be pooled so that viable infrastructure projects can be looked at,” he said.

He explained that the proposed fund would focus on projects capable of generating competitive long-term returns that exceed inflation, thereby protecting the real value of contributors’ savings while supporting national development.

Buwai stressed that participation in the investment vehicle would remain voluntary, with individual Pension Fund Administrators retaining the discretion to decide whether to invest. He added that the final size of the proposed infrastructure fund has yet to be determined.

PenCom data show that invstments through infrastructure funds rose 38 per cent year-on-year to ₦318 billion (about $230 million) as of May, reflecting growing interest among pension fund managers in alternative long-term assets.

The proposed vehicle aligns with PenCom’s broader strategy of expanding the role of pension assets in financing economic development while strengthening Nigeria’s capital market.

The commission has consistently described the pension industry as the country’s largest pool of long-term domestic investment capital, making it well-positioned to support infrastructure financing.

Total pension assets climbed to a record ₦31.32 trillion in May, driven by increased contributions, favourable investment performance and continued expansion of the Contributory Pension Scheme despite a challenging macroeconomic environment.

Working with the Independent Corrupt Practices and Other Related Offences Commission (ICPC), the commission recently recovered more than ₦3 billion in outstanding pension contributions that employers had failed to remit on behalf of workers.

Pension Fund Administrators have increasingly diversified their investment portfolios beyond traditional government securities into equities, infrastructure and other higher-yielding assets.

Earlier PenCom data showed that investments in locally listed equities increased significantly during the first quarter of 2026.

Holdings in Nigerian quoted ordinary shares rose from ₦3.96 trillion at the end of 2025 to ₦5.46 trillion by March 2026, representing a 38.09 per cent increase within three months.

The growth reflected stronger confidence in the domestic capital market and a broader investment strategy aimed at improving long-term returns for pension contributors.

If implemented, the proposed infrastructure investment vehicle would represent another significant step in that diversification strategy, providing Pension Fund Administrators with greater access to infrastructure assets while helping bridge Nigeria’s infrastructure financing gap and supporting long-term economic growth.