Lagos, March 10, 2008
—IFC, a member of the World Bank Group, is working with the National Pension Commission of Nigeria and other stakeholders to explore potential reforms that will allow the country’s pension industry to invest in new asset classes other than listed securities.
Under Nigeria’s Pension Fund Reform Act, 2004, pension funds can only be invested in listed securities—a situation that is increasingly untenable given the huge growth of the pension sector. Nigeria’s pension industry currently has more than 3 million registered participants remitting over $1 billion annually.
“The proposed reforms aim to provide clear investment guidelines and address the likely challenges of introducing new investment classes in the pension fund portfolio,” said Mohammad K. Ahmad, Director General of Nigeria’s National Pension Commission.
Industry players have urged the government to relax existing restrictions, which would allow them to invest in alternative assets such as real estate investment trusts, private equity, infrastructure bonds, and mortgage back securities.
“Allowing the pension funds to go into other areas such as infrastructure bonds will further deepen Nigeria’s capital markets and support domestic companies and infrastructure investments that need long-term local currency financing,” said Solomon Quaynor, IFC Country Manager.
A seminar held on March 5 and 6, 2008 in Abuja, hosted by IFC and the National Pension Commission, provided a forum for stakeholders to consider various proposals under the theme of investing pension funds in alternative assets.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
.
