Leveraging the Pension Industry for Sustained Economic Growth and Development in Nigeria through Targeted Investments
- January 14, 2022
- Posted by: rsispostadmin
- Categories: IJRISS, Social Science
International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue XII, December 2021 | ISSN 2454–6186
Peter Imouokhome
Institution: University of Lagos, Nigeria
Research Aim/Problem:
Investment of pension funds has overly been limited to a few instruments under the direction of the regulator – PENCOM. This has in effect reduced the effectiveness and ability to make contributions to the needed areas of the real economy of Nigeria. This paper gives players, investors, employers, and employees, regulators, academics, and the entire public, in-depth and all-encompassing insight into the Pension industry and how funds can best be channeled taking into consideration today’s macroeconomic exigencies to ultimately benefit all and sundry.
Abstract:
The Nigerian pension industry has been in existence for over seventeen years with the first established promulgation of the pension law coming into force in 2004. The 2014 Pension reform Act has however repealed the provisions of the erstwhile law helping to establish a well-regulated industry.
The resilience and magnitude of current pension funds notwithstanding, there is still a largely untapped market which gives some signs of a huge prospect in this industry. It is projected that the pension industry will lead the growth of the Nigerian economy for the next decades if more attention is paid to a targeted investment of funds in the real sector and in instruments that promise increased returns for contributors – employees even in the face of high inflation and prevalent currency depreciation.
1. Introduction
In retrospect, it is widely attested that an active pension eco-system effectively congregating players – a regulator, administrators, custodians, public and private sector employers and working-class persons across several age groups is well established in Nigeria. The maturity of this industry relative to more advanced economies of the world like the US or the OECD nonetheless, the pension industry globally has displayed great resilience, navigating the turbulence and whirlwinds – the macroeconomic shocks, economic downturns, recession, and more recently a global pandemic in the year 2020 which instigated a fold-down of companies, job losses and a sharp drop in macroeconomic numbers and indices. In spite of periods of passive economic activities, the pension industry has over time consistently helped in mobilizing the much-needed funds – more notably from the middle-income segment of the economy for propelling growth.
