Nigeria’s pension industry recorded a fresh surge in offshore exposure in the third quarter of 2025, as investment in foreign money market instruments jumped by 111.76 per cent, reflecting heightened appetite for dollar-denominated assets among Closed Pension Fund Administrators (CPFAs).

Industry data show that the total Net Asset Value (NAV) of Nigeria’s pension funds rose by 5.93 percent (₦1.46 trillion) to ₦26.09 trillion as at 30 September 2025, up from ₦24.63 trillion at the end of June.

Analysts attribute the growth to strong investment performance, particularly gains in domestic equities during the period.

A breakdown of asset movements, showed that the three fastest-growing classes were Foreign Money Market Securities (+111.76%), Cash & Other Assets (+74.26 per cent), and mutual Funds (+19.13 percent).

The sharp rise in foreign money market holdings underscores more proactive liquidity management by CPFAs and a gradual shift toward diversified, yield-bearing instruments outside Nigeria.

CPFAs—legacy, defined-benefit pension schemes predating the 2004 Contributory Pension Scheme reforms—typically manage older corporate pension plans for multinational and large local firms. Operators include Nestlé Nigeria CPFA, Progress Trust CPFA, Shell Nigeria Closed Pension Fund, and TotalEnergies EP Nigeria CPFA Limited.

Their foreign investment positions rose significantly to ₦109.996 billion in September 2025, from ₦51.944 billion three months earlier.

Market sources told MoneyCentral that CPFAs with excess dollar liquidity have been actively buying U.S. Treasuries and placing funds in dollar-denominated bank deposits offering competitive yields amid global monetary tightening.

Total pension assets under CPFA management also increased modestly, rising 2.73% to ₦2.71 trillion as of the end of September, compared with ₦2.63 trillion in June. The growth was driven by improved market valuations, better portfolio returns, and steady inflows.

Pension experts say the renewed tilt toward foreign assets reflects both the need for currency hedging and the search for stable returns in a period of domestic market volatility. They note that while regulatory limits still cap offshore exposure, CPFAs—unlike regular Pension Fund Administrators (PFAs) under the CPS—have relatively more flexibility due to the nature of their schemes and the maturity structure of their obligations.

With the naira facing renewed pressure and global yields trending higher, analysts expect CPFAs to continue favouring dollar assets into 2026, especially as U.S. Treasury yields remain attractive relative to domestic fixed-income instruments.

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