Deepening The Nigerian Capital Market Amidst Global Turmoil; Pension Funds As A Vital Home-Grown Recipe

CONSTRAINED BY PAST EXPERIENCE

Past experiences in pension policy and implementation in Nigeria have stalled the actualization of consistent calls for utilization of the pension assets in investments in the capital market. The hardship of retirees who were deprived of their pension entitlements under the defunct government-controlled pension regime, mismanagement of funds by past managers and the relative volatility of the capital market among others; are the reasons why the RIPFA has largely restricted investment of pension assets in Nigeria. However, we believe that the National Pension Commission should learn from other climes where pension investments have been successful, by striking a balance between the “safety" of the populace’s pensions and the development of the capital market. Broadly speaking, this can be achieved by making the regulations more accommodating and flexible while strengthening corporate governance ethos in the market.

CONCLUSION

In “Pension Markets in Focus 2013”, a research paper by the Organisation for Economic Co-operation and Development (OECD), it was reported that investment of pension fund assets contribute significantly to the development of major capital markets in the advanced and fast-growing emerging nations of the world (in 2012 alone: 48.9% in the US; 46.0% in Australia; 41.6% in Chile; 37.1% in Finland and over 50% in Germany, Spain and Norway). The time for Nigeria to follow these examples is “now”. We urge the SEC and other stakeholders in the Nigerian capital market to develop more attractive products while the government should provide an enabling legal/regulatory environment to assure sanity in the market and thus protect pension funds invested. This way, a sustainable self-reliant growth in line with “The Nigerian Capital Market Master Plan (2015-2025)” will be triggered.

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