Analysis of Pension Operating Environment for the Year 2021

National Pension Commission (PenCom) has released its annual report for the year 2021.

PenCom in the 2021 annual report gave an analysis of the pension operating environment for the year. PenCom stated in the report that the data used for the analysis was sourced from the Central Bank of Nigeria (CBN), NGX Exchange and National Bureau of Statistics.

Below are the analyses;

Macroeconomic Developments

In the year under review, aggregate Gross Domestic Product (GDP) stood at N173,527,662.34 million in nominal terms and indicated a year-on-year nominal growth rate of 13.92% when compared to the aggregate GDP of N152,324,070.59 million recorded in 2020. In real terms, Nigeria’s GDP stood at N72,393,673.44 million which was indicative of 3.40% annual growth rate in 2021. This performance showed a sustained positive growth and steady economic recovery in 2021.

The chart below shows the annual GDP growth rate over the last five years (2017 – 2021).

The Oil Sector

During the year under review, Nigeria recorded an average daily oil production of 1.50 million barrels per day (mbpd). This was lower by 0.06mbpd than the daily average oil production of 1.56mbpd recorded in the same period in 2020. The sector experienced an annual growth rate of -8.30%, and contributed 7.24% to real GDP in 2021.

The Non-Oil Sector

Growth in the non-oil sector stood at 4.73% in real terms during the year 2021. This rate was higher by 3.05% point compared to the rate recorded the same period in 2020. This performance was mainly as a result of increased productivity in the Agriculture; trade; Telecommunication and Financial Services industries. The sector also contributed 92.76% to the nation’s GDP in 2021.

Developments in the Financial Market

During the year under review, the performance of the capital market was in tandem with projections as fiscal and monetary stimulus packages energized renaissance in the real sector, despite the fears of Omicron variant of the COVID-19 outbreak impacting negatively on the market. Following the marginal economic recovery in 2021, the Nigerian capital market witnessed a decline in growth, even though the performance indices sustained positive trajectory.

In specific terms, investors traded N1.544 trn worth of listed stocks. This was however lower when compared to the N1.581 trn that was exchanged in the same period in 2020. The All Share Index (ASI), a major performance indicator rose by 6.07% to close the year at 42,716.44 points, up from the 40, 270.72 points recorded at the close of trading in 2020. Market capitalization on the other hand, stood at N22.3trn as at 31 December 2021. This indicated a N1.24trn gain on the N21.1trn recorded in the same period 2020.

In the fixed income market, the performance of the Bonds Market, indicated that market capitalization had risen from N17.501 trn in 2020 to close the year at N19.596 trn. The average yields on Treasury bills and Bonds increased rapidly from 6.1% and 5.5%, respectively, to 6.6% and 11.8% by mid-year. Thereafter, competing factors between the supply and demand sides caused yields to trend within a tight band through the rest of year.

Through the year, the market witnessed bearish trends mainly due to volatility even as yields rose significantly in first half of the year due to a combination of factors, including; premature sell off of assets by large institutional investors, the significant reprising of OMO bills, frontloading of borrowings by the government as they sought to raise funds to bridge the budget deficit etc.

Checkout PensionNigeria breakdown of important aspects of the PenCom 2021 Annual Report

PenCom 2021 Annual Report Breakdown

Chairman’s Statement in PenCom 2021 Annual Report
Director General’s Report in PenCom 2021 Annual Report
Analysis of Pension Operating Environment for the Year 2021
Micro Pension Registrations per PFA as at Dec 2021 and Fastest Growing PFAs by Micro Pension Registrations
Update on the Micro Pension Plan for Year 2021
N93.49 Billion Pension Contributions not in Contributors Retirement Savings Account
Defaulting Employers pay Penalties of N10.03 billion into Employees RSA as PenCom takes 67 Employers to Court
Redacted Reports – Unfunded RSAs and RSAs with Incomplete Documentation
PTAD paid N99.94 billion to Federal Government Retirees in 2021
PenCom Stakeholder Engagement and Public Enlightenment Activities in 2021
Biggest PFAs by RSA Pension Fund Assets under Management & Fastest Growing PFAs in 2021
Update on Implementation of Minimum Pension Guarantee
PenCom provides Scanty Update on using RSA for Payment of Residential Mortgage
PenCom approved over N1.46 Trillion for PFAs to pay RSA Holders
PFAs made over N340.57 Billion Total Income in 3 years

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