The Chief Executive Officer (CEO), Pension Funds Operators Association of Nigeria (PenOp), Mr Oguche Agudah, on Thursday said most pension fund managers would invest heavily in infrastructure in 2023.
Agudah said this during a webinar organised by PenOP, with the theme: “The Nigerian Economic and an Investment Outlook: A focus on Pension Fund Investment Strategies,” in Lagos.
He said that 42 per cent of the Pension Fund Administrators (PFAs) indicated that they were actively looking for investments in infrastructure in 2023, while 50 per cent would consider it.
According to him, though fund managers are careful about private equity, they will consider the investment in infrastructure on a deal by deal basis.
Agudah said that 25 per cent of the fund managers had assured that they would invest in private equity while 67 percent would consider it.
“Fund managers are looking to invest in impact funds but transparency and structure are key,” he said.
On various dealings in equities and securities, the PenOp CEO disclosed that there was reduction in engagement with equities in 2022 from 7.73 percent in 2021 to 6.79 per cent in 2022.
Agudah explained that government securities as share of portfolio declined by 118 basis points to 65.44 percent, while there was reduction in interaction with money market securities by 1.92 percent.
Also, Mrs Rita Babihuga-Nsanze, Chief Economist, Africa Finance Corporation (AFC), said some of the steps the incoming government must take to put the economy on the right path were to stop the oil subsidy policy.
She said the incoming government must address security in oil sector corridor, subsidy regime and enthrone the expected reform in forex market.
Babihuga-Nsanze expressed disappointment that Nigeria failed to accumulate its foreign reserves in spite of the high international oil price.
According to her, foreign exchange reserves fall by 3.5 billion dollars or eight per cent between January 2022 and December 2022.
“The Federal government earned no revenues from the sale of crude oil despite the windfall crude oil prices recorded in 2022 due to subsidy payments.
“Government interest payments as a share of revenue have more than doubled from 19.7 percent in 2018 to the current 48 per cent.
“Low amortisation requirements for 2023 and 2024 offer Nigeria some breathing space on the external front.
“Unfortunately, we do not foresee high levels of debt stress from Nigeria’s Eurobond repayments in the near term.
“This is because majority of Nigeria’s external debt is multilateral based lending, which is 47 per cent of total stock,” she said.
Babihuga-Nsanze said that the Eurobond markets have unfortunately remained inaccessible to Nigeria for its financing needs due to the country’s current sovereign spreads and credit rating.
She warned that without the necessary structural reforms, the current forex liquidity pressure would persist in 2023 and potentially in 2024, on the back of increasing downward pressure on foreign reserves.