The devaluation of the Naira has had a significant impact on the net asset value of pension funds in Nigeria, in the past year.
The data reviewed, shows that, the net asset value of pension funds in US dollar terms has declined by $18.9 billion from $33.3 billion as of January 2023 to $14.4 billion as of January 2024, according to PenCom data.
The assets of pension funds in Nigeria reached N19.53 trillion by January 2024, representing a 30.3% year on year growth compared to the value of N14.99 trillion registered in January 2023.
The growth is attributed to impressive investment strategies by pension fund managers. However, when the Naira values are converted to US dollars, this narrative is reversed.
In January 2023, with an exchange rate of approximately N450/$, the NAV of N14.99 trillion equated to around $33.3 billion. However, by January 2024, with the exchange rate depreciating to about N1357/$, the recorded NAV of N19.53 trillion declined to $14.4 billion.
The performance of pension fund managers can be evaluated as quite commendable as the 30.3% year-on-year growth recorded in the NAV of pension fund assets as of January 2024 notably outperformed the country’s inflation rate of 29.90% as of January 2024.
Between January 2023 and January 2024, the number of Retirement Savings Accounts (RSA) increased by 3.36% from 9.89 million to 10.22 million.
In contrast to the N428 billion recorded in November and December 2023, January 2024 recorded a significant increase of pension fund’s net asset value by over US$1.28 trillion.
In December 2023, the Net Asset Value (NAV) of pension funds stood at $20.4 billion, based on an exchange rate of N899/$. However, by January 2024, it had decreased to $14.4 billion, with an exchange rate of N1357/$.
