The Securities and Exchange Commission (SEC) has reaffirmed its strong support for Pension Fund Administrators (PFAs) and their professionals in driving economic growth, particularly through capital market investments, to bridge the nation’s infrastructural gap.
Emomotimi Agama, SEC Director-General made this commitment during the 2024 Investment Advisers and Portfolio Managers (IAPM) Conference held in Lagos recently.
Agama, represented by the Executive Director of the SEC, Bola Ajomale, stressed the essential role of the SEC in facilitating growth across the capital market.
He assured stakeholders of enhanced infrastructure investment portfolios that will allow better penetration of the pension industry.
He emphasized the SEC’s readiness to embrace innovative ideas and initiatives that can propel the nation’s growth in line with President Bola Tinubu’s $1 trillion economy.
Agama stated, “Our focus at the SEC is to enable all aspects of the capital market to achieve growth. Certainly, the pension industry, and the professionals, is one of our priorities. I assure you that we are listening.
“As we deliberate today on your role in moving the pension industry into infrastructure and development, the SEC is available for your ideas and innovation and how we can help you in driving the economy forward,” Agama affirmed.
Abimbola Olashore, President/Chairman of Council, IAPM, highlighted the relevance of the conference themed “Driving Economic Growth and Developmental Agenda with Pension Fund – The Roles of Investment Professionals.”
Olashore emphasized the urgent need to draw the attention of institutional investors, especially pension funds, to the huge funding gap in the infrastructure sector and the potential for high returns on investment for pension funds if well harnessed and managed.
“The pension industry holds an excess of N19.787 trillion with over 10.3 million Retirement Savings Accounts (RSAs) as at April 2024, according to the National Pension Commission (PenCom). Such a large pool of funds should be channelled into more productive development leveraging the capital market,” Olashore advised.
While noting that the pension industry has its fair share of challenges, including restricted investment options in the capital market, stagnated growth in the economy, a significant informal sector estimated at 65 per cent of GDP, low participation, and an elevated inflation rate of 33.95 per cent, among others, he urged the creation of more expertise in the infrastructure sector who understand the investment market dynamics.
“Institutional investors, in particular, pension funds, will play a major role in the financing of long-term productive activities that support sustainable growth in the infrastructure sector,” he added.
Oguche Agudah, CEO of the Pension Fund Operators Association of Nigeria (PenOp), urged more efforts in the aspect of regulations guiding PFA’s investments in infrastructure.
He emphasized the need for a well-structured and defined market that will allow smooth operations while delivering maximum value to all stakeholders. “Before pension funds could commit large capital to a project such as infrastructure, there must be transparency, long-term and efficient regulations governing the sector.
“Also, such investment will be possible only if investors can earn adequate risk-adjusted returns and if appropriate market structures and risk-free financial securities are in place to attract pension funds.”