Nigeria’s pension fund assets experienced substantial growth in the first half of 2025, reaching N24.63 trillion, a 9.41% increase compared to the end of 2024. While this represents a significant expansion, the growth rate was slightly lower than the 11.59% recorded during the same period in 2024. This growth trajectory continued the trend of consistent monthly increases observed throughout the year, culminating in a milestone of surpassing N24 trillion in May 2025. The composition of these assets remained heavily weighted towards government-backed securities, including FGN bonds, treasury bills, Sukuk, agency bonds, and green bonds, which collectively accounted for N15.19 trillion. This preference for government instruments persisted despite ongoing advocacy for diversification into alternative asset classes by pension fund administrators. Other significant investment areas included corporate debt securities at N2.26 trillion, money market instruments at N2.24 trillion, and mutual funds at N183.82 billion.
Parallel to the growth in fund assets, the number of Retirement Savings Accounts (RSAs) also witnessed a notable increase. During the first six months of 2025, approximately 214,563 new RSAs were registered, bringing the total to 10,796,862 by June 2025. This 2.03% increase reflected the growing participation in the contributory pension scheme. However, considering the estimated 78.14 million individuals comprising Nigeria’s labor force in 2024, the current number of RSAs indicates a substantial untapped potential for enrollment. The Nigeria Labour Force Report Statistics for the second quarter of 2024 revealed an encouraging employment rate of 76.1% for the working-age population, a positive improvement from the 73.1% recorded in the first quarter of the same year. This rising employment rate underscores the opportunity to further expand RSA coverage and strengthen the pension system’s overall impact.
A significant development impacting the pension sector and the broader Nigerian economy was the inclusion of pension fund administrators’ activities in the rebased Gross Domestic Product (GDP). This rebasing exercise significantly increased Nigeria’s GDP from N205.09 trillion in the 2019 base year to N372.82 trillion. This inclusion recognizes the growing economic contribution of the pension industry and provides a more accurate reflection of the financial sector’s size and activity. The rebasing is also expected to enhance transparency and attract greater scrutiny to the pension sector, potentially fostering increased participation and improved governance. Moreover, the real GDP growth of 3.13% year-on-year in the first quarter of 2025, compared to 2.27% in the corresponding period of 2024, further highlights the positive economic momentum and the potential for continued growth within the pension industry.
Experts have lauded the inclusion of pension activities in the rebased GDP as a positive step. Ayokunle Olubunmi, Head of Financial Institution Ratings at Agusto&Co, emphasized that this inclusion provides a more comprehensive picture of the financial sector, previously obscured by the omission of significant pension-related activities. The substantial growth of the pension industry since the 2004 Pension Act, with assets under management exceeding N21 trillion, coupled with its significant role in the bond market, underscores its economic relevance. Olubunmi believes that this increased visibility will bring greater clarity to the pension sector and contribute to a better understanding of its dynamics.
Dr. Olufemi Abass, an Associate Professor at Lagos State University, echoed this positive sentiment, highlighting the importance of recognizing the investment aspect of contributory pensions. Unlike the previous defined benefits scheme, where employers solely bore the responsibility, contributory pensions involve active investment management by pension fund administrators. Including these activities in the rebased GDP accurately reflects their contribution to economic growth and development. This move is seen as a welcome development, signaling a greater appreciation for the role of pensions in the national economy.
In summary, the first half of 2025 witnessed continued robust growth in Nigeria’s pension fund assets, coupled with an expansion in RSA registrations. The inclusion of pension activities in the rebased GDP signifies a crucial step towards recognizing the sector’s increasing economic importance and promoting greater transparency. While the preference for government securities remains a key characteristic of pension fund investments, calls for diversification into alternative assets continue. The positive economic indicators, including rising employment rates and real GDP growth, create a favorable environment for further development and expansion of the Nigerian pension system. The growing recognition of the pension sector’s contribution to the national economy, coupled with expert endorsements of the GDP rebasing, sets the stage for enhanced scrutiny, increased participation, and improved governance within the industry.
