Pension Fund Administrators (PFAs) in Nigeria may experience a decline in returns due to new policy restrictions on commercial papers. The recently introduced regulations are anticipated to impact the profitability of investments in these short-term unsecured promissory notes that are widely used by companies to finance their operations.
This development is significant as commercial papers have been a popular investment vehicle for PFAs seeking higher returns within the fixed-income market. The change in policy could necessitate a shift in investment strategy for PFAs, potentially influencing the overall performance and growth of pension funds in the country.
Stakeholders are closely monitoring the situation to understand the full implications of this policy shift on the pension fund sector.
Source: Read more