Pension News

Analysis of Pension Operating Environment 1st Quarter 2023

National Pension Commission (PenCom) has released its report on the Pension Industry for the 1st quarter of 2023.

PenCom in its report gave an analysis of the pension operating environment for 1st quarter 2023. PenCom stated in the report that the data used for the analysis was sourced from S&P/FMDQ Sovereign Bond index 2023, National Bureau of Statistics 2023, Nigerian Stock Exchange website/report 2023 and FSDH Nigeria’s Macroeconomic Report 2023.

Below are the analyses;

Macroeconomic Development

The Nigerian economy is expected to grow at a slower rate of 2.9% World Bank, 3.0% AFDB, and 2.5% by FSDH than 2022 which was 3.1% due to the effects of the Naira redesign policy, continued high inflation, fuel scarcity and shortage of foreign exchange coupled with uncertainty arising from the general elections and insecurity among others, all of these factors impede economic growth.

Oil revenues have also picked up despite the drop in global oil prices between December, 2022 and March, 2023. This was due to an increase in daily production to 1.6 million barrels in Q1 2023. This did not translate into growth in revenue as gains from the increased production was offset by local subsidy payment on petroleum.

In line with the turnout of global events, the domestic economy has witnessed rising inflation, as the rate of inflation increased to 21.91% in March, 2023. The Monetary Policy Committee of the Central Bank of Nigeria (MPC) has increased the monetary policy rate to help reduce the growth rate of domestic money supply and moderate exchange rate pressures by incentivizing the retention of foreign capital and credit lines. However, inflationary pressures are expected to continue particularly with further development in global inflation trend.

Developments in the Capital Market

The Stock Market

Activities on the Nigerian Bourse witnessed an improvement in Q3 2023 as the All Share Index (NSE-ASI) and Market Capitalization closed at 54,232.34 points and ₦29.54 trillion, compared to 51,251.06 points and ₦27.92 trillion in Q4 2022 indicating a gain of 5.82% (ASI) and 5.80% (Mkt Cap), respectively.

The local bourse recorded a total turnover of 2.071 billion shares worth ₦17.562 billion in 17,917 deals as at 31 March, 2023, indicating a 10.16% improvement in turnover of shares and 48.86% in deals volume, when compared to total turnover of 1.880 billion shares worth ₦18.988 billion in 12,036 deals recorded as at 31 December, 2022. The noted improvement was an indication of increased investors’ confidence in the market.

The Bond Market

The S&P/FMDQ Sovereign Bond Index, that tracks the performance of sovereign debt publicly issued by the Federal Government of Nigeria, decreased by 0.41% as it dropped from N614.29 Billion as 30 December 2022 to N611.76 Billion as at 31 March 2023. The Monetary Policy Committee increased the policy rate (MPR) by 50 bps from 17.50% to 18.00% in the month of March 2023, in order to curb the rising inflation rate in the economy that was caused by the rising cost of energy prices due to the Russian-Ukraine war. The increase in the MPR resulted in an increase in short-and-medium-term yield.

Check below for PensionNigeria breakdown of all the important aspects of the PenCom 1st Quarter 2023 Report

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DONT MISS our 1st Quarter 2023 Report Series

Update on RSA Transfer System (RTS) 1st Quarter 2023
List of Organisations Issued Compliance Certificates as at 31 March 2023
Total RSA Registration as at 31 March 2023
Status of Contributory Pension Assets as at 31 March 2023
Analysis of Pension Operating Environment 1st Quarter 2023

Appointment & Resignation of Pension Operators’ Board Members and Top Management Q1 2023
PenCom Sanctions 7 PFAs
Recovery Agents recover ₦24.53 billion from Defaulting Employers as PenCom takes 4 Employers to Court Q12023
Update on NSITF & Refund of Pension Contribution to Military & SSS Q1 2023
Status of Implementation of CPS in States as at 31 March 2023
More reports will be added here once available


Also Check out
Performance of all PFAs in Nigeria

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