IMPACT OF PENSION FUND ON THE ECONOMIC GROWTH OF NIGERIA

Abstract

In a quest to solve problems associated with the old unfunded pension scheme and improve economic growth in Nigeria, the Federal Republic of Nigeria repealed her pension degree 1959 and enact a new Pension Reform Act 2004 to adopt a Chilean contributory pension scheme model which is designed towards mobilization of savings for long-term capital, financial markets development and improved economic growth. This study examines the relationship between pension fund and economic growth in Nigeria from the year 2004 to 2021. In this pursuit, the study adopted ex post facto research design method and the secondary data obtained from the National Pension Commission Annual Report and the Central Bank of Nigeria Statistical Bulletin for the purpose of the study were analyzed with the use of Autoregressive Distributive Lag Model. The findings of the study revealed that pension contributions from public sector have a positive impact on the economic growth. Meanwhile, pension contributions from private sector have a negative and significant impact on the economic growth of Nigeria. The study concluded that pension fund have significant impact on the economic growth of Nigeria. To address the negative impact of pension fund on the economic growth of Nigeria, the study recommended that appropriate investments analytical technique should be employed in the determination of investment that smooth out returns on investment. It also recommended that the stakeholders in pension industry should put in place policy that will ease the accessibility to pension fund contributions by pension contributors who are willing to undertake investments from the outset as soon as they discovered viable investment opportunity and not when they attain retirement age.