Operator Advocates Using Pension Funds To Bridge Infrastructure Gap

The managing director and chief executive of Access Pensions, Dave Uduanu, has said, there is a need to utilise the pension funds in Nigeria to address its unrelenting infrastructure gap.

Uduanu, while speaking at 8th Annual National Conference of Nigeria Association of Insurance and Pension Editors (NAIPE) in Lagos, noted that, by tapping into the pension fund investment landscape; Nigeria could reduce its reliance on external borrowing and mitigate financial vulnerabilities. This approach, he said, is especially crucial given the ongoing expansion of the industry and the limited investment instruments available for pension funds.

During the panel discussion, Uduanu, represented by Access Pensions’ Chief Investment officer, Wale Okunrinboye, noted that, while a substantial portion of pension investments currently resides in fixed income, there’s room for greater allocation to infrastructure.

He stated that, “One thing we can do better is on visible impact. One way people can truly feel the tangible impact of their pensions is in the area of infrastructure investments. Today, a large portion of pension fund investments are in fixed income, but imagine driving on a road built with pension funds, that’s when people will realise their pension fund is truly working for them.”

He also raised a crucial question regarding the future of pension fund portfolios, saying, “we started this industry in 2004, and now it’s about N16 trillion. In the next 10 to 15 years, what will the investment portfolio look like? Will it still be dominated by government securities, or will it play a more significant role in financing infrastructure and stimulating economic growth?.”

He reiterated the persistent infrastructure deficit in Nigeria and suggested that, with a well-defined framework, long-term funds, such as pensions and insurance, could be channelled effectively toward infrastructure financing.

‘’Over the years, the Nigerian government has been faced with the challenge of infrastructure financing deficits. What better way to address this than by utilising pension and insurance funds, which are inherently long-term and capable of providing flexible domestic capital for these critical projects,” he concluded.