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
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.
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.