Nigerian pension fund managers have tripled their exposure to infrastructure over the past five years, driven by better project structuring, rising returns, and a more supportive regulatory environment.
Investments in infrastructure funds surged 218 percent in the five years through 2020, hitting N207.58 billion in February 2025, data from the National Pension Commission shows. That’s a 37.6 percent increase this year alone.
Although the amount may pale in comparison to total assets of N23 trillion, pension funds can only invest 5 percent of their assets in infrastructure funds.
Nigeria remains one of five countries globally to still have a limit on infrastructure investments. In all other countries, the infrastructure investment allocation is unconstrained.
The trend points to rising confidence in infrastructure as a hedge against inflation and a source of stable, long-term returns amid market volatility. Analysts at the Pension Fund Operators Association of Nigeria (PenOp) noted that allocations have grown steadily—from N65.19 billion in 2021 to N207.58 billion in 2025.
“This reflects growing confidence in infrastructure as a long-term asset class,” said Agudah Oguche, chief executive officer at PenOp. “These investments not only diversify pension portfolios but also contribute meaningfully to national development.”
PFAs increased infrastructure fund allocations to N75.02 billion in 2022, N113.49 billion in 2023, and N150.84 billion by end-2024. During this period, several key infrastructure funds attracted sizable inflows, including the Nigeria Infrastructure Debt Fund (NIDF), which backed projects in power, roads, and transport.
InfraCredit-backed initiatives also gained traction, allowing PFAs to invest in clean energy, logistics, and student housing with enhanced risk mitigation. The Fund for Agricultural Finance in Nigeria (FAFIN) supported rural infrastructure through agri-finance, while Nigerian Real Estate Investment Trusts (NREITs) gave PFAs exposure to affordable housing.
“As pension funds channel more investments into infrastructure bonds, real estate developers will leverage the improved accessibility and services to offer better real estate solutions,” said John Edumoh, CEO of Manroe Realty. “Infrastructure investments fuel improvements in roads, bridges, and utilities, and the real estate market can expect a surge in value with enhanced access to previously underserved areas.”
By February 2025, pension assets climbed further to N23.3 trillion, up from N22.86 trillion a month earlier—an additional N399.5 billion. Of that, N14.5 trillion sits in federal government securities, led by N12.3 trillion in FGN bonds.
Domestic equities took up N2.6 trillion, while money market instruments accounted for N2.2 trillion. Federal Government Securities made up 63 percent of total assets, with the breakdown as follows: FGN Bonds (60.11 percent), Treasury Bills (2.33 percent), and Agency, Sukuk, and Green Bonds (0.55 percent).
Investments in domestic quoted equities stood at N2.05 trillion, or 9.61 percent of total assets—a net increase of N86.52 billion compared to N1.97 trillion in June 2024.
While the proportion remained stable, the rise was buoyed by improved stock valuations. The Nigerian Stock Exchange Pension Index (NSE-PI) appreciated by 6.66 percent in Q3 2024, reversing a 4.37 percent drop in the previous quarter. (BusinessDay)
