About N3.25tn collected from workers by
Pension Fund Operators under the Contributory Pension Scheme has been
invested in Federal Government of Nigeria Bonds.
The Chairman of the Pension Fund
Operators Association of Nigeria, Mr. Misbahu Yola, who spoke to
journalists at the end of the body’s forum in Abuja on Thursday, said 65
per cent of the N5tn that had accrued under the CPS had been invested
in FGN Bonds.
Yola said the attraction of FGN Bonds to
pension fund operators was the safety and security of the debt
instrument as it had the backing of the Federal Government, which would
do anything possible to remain credit worthy.
He
also disclosed that about 12 per cent of the fund had been invested in
equities and another 15 per cent in the money market. This means that
about N600bn and N750bn had been invested in equities and the money
market, respectively.
Yola said, “More than 65 per cent; close
to 70 per cent of the industry’s funds are in FGN Bonds and treasury
bills. You have another 12 per cent in equities and another 15 per cent
in the money market. The bulk of it is in government securities.
“We are investing in the bonds because of
the safety of the funds. Where else can we put the money? We buy bonds,
we buy treasury bills. They are still safer than putting money in the
bank.”
Answering question on the proposed
phasing out of the FGN Bonds from the JPMorgan index, Yola said the
bonds had been doing well before JPMorgan started listing them, but
added that the decision to delist the bonds could lead to lower
participation in the country’s bond market by foreign investors.
He said, “The bonds were resuscitated
around 2003, JPMorgan came in about 2012. Before JPMorgan came into the
country, the business of the bond was already on. The whole idea of
having that index is to ensure that foreign investors can have
information guidance. It gives them confidence. Foreign investors were
here even without the index.
“Removing Nigeria from the index means
that foreign investors may not be looking at the index to put their
money into the Nigerian debt market. They can still invest by making
their own investigation.
“However, foreign participation in the
Nigerian bond market had significantly dwindled even before this time
for a number of reasons.”
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