•Picks pension as Nigeria’s regulatory success story

The 2024 State of the Enterprise (SOE) 2024, a yearly report published by EnterpriseNGR, has passed a vote of confidence in the growth of the mutual fund ecosystem, saying the registered funds increased from 133 to 144 last year, a modest growth rate of 8.3 per cent.

The report unveiled last week also noted the tremendous growth of banking, insurance, asset management, pension and capital markets.

Last year, the all-share index (ASI) saw a growth rate of 46 per cent. EnterpriseNGR, a member-led group fostering collective advocacy to develop Nigeria’s financial and professional services (FPS) sector, considered the growth a remarkable achievement.

It noted that the last time the capital markets achieved something close to its 2023 performance was in the wake of the pandemic in 2020.

The market capitalisation jumped nearly 50 per cent to about N41 trillion, following substantial trading transactions and business activities.

The report noted that banks and other financial services accounted for 4.6 per cent of the output, which translates to financial institutions accounting for approximately N5 of every N100 generated nationally, up from about N4 in 2022.

“The collective deposit money banks had total assets of N121 trillion, which is equivalent to half of the national gross domestic product,” the report said.

It observed the banks also played a significant supportive role in supporting businesses and the productive sector.

“The sub-sector’s role in tax revenue was equally commendable, ranking third out of the 23 economic sectors, in income tax and VAT generation to the government coffer. The insurance sub-sector saw impressive momentum in 2023, with gross premium written reaching a ₦1 trillion mark.

“Even though this growth was driven by a regulatory intervention, such as increased motor insurance rates, the sub-sector paid 36 per cent more claims than in 2022, an indication that the insurance sub-sector is rising to its responsibility to protect policyholders against adverse financial and economic consequences,” EnterpriseNGR noted.

It took note of the impressive performance of the asset management sub-sector, which drives much of the activity in the markets. The sub-sector, according to the report, is laying the foundation for national future growth through collective investments.

“The total net asset value (NAV) for all collective investment schemes soared by almost 50 per cent in 2023,” it noted, adding that the growth highlights the growing confidence in the markets.

It pointed out the success of pension as one of “Nigeria’s regulatory success stories”, steadily building a secure future for millions of employees.

With over 10 million contributors, the sub-sector has accumulated over ₦18 trillion in investments, with 65 per cent invested in government securities, it noted.

“By 2023, the sub-sector had paid over ₦400 billion in retirement benefits and about ₦36 billion to contributors temporarily out of jobs, in 2023. The Pensions sub-sector is not just a growing force in the economy, it is a safety net,” it noted.