By Peter Egwuatu

The Pension Fund’s investments in Federal Government (FG) Securities rose by 18.7% Year-on-Year, YoY, in the first quarter 2025, Q1’25    to N14.48 trillion from N12.20 trillion in the corresponding period of 2024, Q1’24.

This was disclosed in the latest pension funds industry portfolio report from the National Pension Commission, PenCom, detailing activities in the sector for the first quarter of the year ended March 31, 2025.

Market operators attributed the rise in the investments in FGN securities to the high Monetary Policy Rate, MPR, regime established by the Central Bank of Nigeria, CBN, over the last six months as well as the relatively low risk factor of the securities.

Notably, due to the rising inflationary trend, the CBN had continuously retained MPR at 27.5% since December 2024, which is the bench mark interest rate for government and other corporate securities in the country.

Vanguard’s findings revealed that the Federal Government securities accounted for 62 % of the total pension fund assets worth N23.32 trillion.

The investments in FGN Securities include FGN Bonds, Treasury Bills, Agency Bonds, Sukuk Bonds and Green Bonds.

In the review period, the Hold Till Maturity, HTM FGN Bonds accounted for 85.5% of the total FGN securities posting N12.389 trillion followed by Available for Sale, AFS’s FGN Bonds accounting for 9.6% of the total FGN securities valued at N1.397 trillion. The Treasury Bills occupied the third position recording N593.217 billion and accounted for 4.1% of the total Federal Government securities followed by Sukuk Bonds, which recorded N9.248 billion to account for 0.6% of the total FGN Bonds.

Commenting on this development, analyst and Head of Investment and Research at Fidelity Securities Limited, FSL, Mr Victor Chiazor, said: “The rise in PFAs’ investments in Government securities in first quarter was triggered by the high interest rate environment during the period. The CBN in order to tame rising inflation rate has not reduced the MPR since the beginning of the year.”

In his own part, analyst and Managing Director/CEO of A

PT Securities and Funds Limited, Mallam Garba Kurfi, said: “The Investment in FGN Bonds by PFAs is necessary because of its availability when compared with the other Investment. Also, the less risky nature of the securities makes it attractive even when the equities at the moment have recorded higher return on investment”.