The Pension Fund Administrators (PFAs) are set to further deepen investment of the pension funds into Sharia-compliant and ethical instruments in a move to explore investment options available under Retirement Savings Fund (RSA) Fund VI.
To expand this investment outlet, the Pension Fund Operators Association of Nigeria (Penop), along with the National Pension Commission (PenCom) recently convened a webinar titled ‘Maximizing the Potential of RSA Fund VI: Exploring Sharia-Compliant Investments.’
In his opening remarks at the event, the Chief Executive Officer (CEO) of PenOp, Oguche Agudah, emphasised the importance of expanding the investment options available under RSA Fund VI while calling on pension operators for deeper industry collaboration to address existing challenges and seize opportunities for growth in Sharia-compliant and ethical investments.
Similarly, the chairman of the Pension Industry Non-Interest Advisory Committee (PINAC), Dr. Adam Muhammad Abubakar outlined the current challenges PFAs face in accessing Sharia-compliant instruments, stressing the need for more investment outlets and enhanced awareness about the growth potential of non-interest financial products.
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Bil-yaminu Yakubu, who represented the head of Investment supervision of PenCom, Mr. Dahiru Abdulqadir, highlighted the efforts the commission had made to advancing the ethical investment space, stating that, “we understand the challenges PFAs are facing in terms of regulatory clarity. Pencom is committed to providing clear rules that will foster confidence in investing in non-interest instruments, ensuring compliance while driving innovation.”
The session also highlighted how Sharia-compliant investments, particularly, Sukuk bonds, have played a crucial role in raising infrastructure funds.
Attendees argued that expanding the issuance size of such instruments is seen as key to attracting more PFA participation and driving the growth of RSA Fund VI even as they discussed the importance of clear guidelines from PenCom and Securities and Exchange Commission (SEC) to support the growth of non-interest financial instruments.
Treasurer of Alternative Bank, Abimbola Yusuf, who spoke on their transition into a standalone non-interest bank and highlighted upcoming products for Fund VI, stating that, “we are committed to delivering tailored financial services that comply with Islamic finance principles. Our goal is to offer pension fund administrators innovative products that meet both liquidity needs and ethical standards.”
The CEO of Marble Capital, Akeem Oyewale echoed similar sentiments, adding that, “the market for Sharia-compliant investments is growing, and we are developing a robust pipeline of instruments to support PFAs in diversifying their portfolios. Collaboration with issuers is key to ensuring that the size of Sharia-compliant issuances grows, creating more investment opportunities.”
As the demand for non-interest financial products continues to grow,pension fund operators remain committed to ensuring that Sharia-compliant and ethical investments can thrive within Nigeria’s pension framework.
Meanwhile, the newly elected compliance executives of the pension industry have assumed their roles at a critical time, as the sector faces increasing scrutiny and demand for improved operational standards.
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