AfDB: Nigeria Can Use Pension and Sovereign Wealth Funds to Drive Growth

An economic expert, Professor Kevin Urama, argues that Nigeria can unlock significant development resources by harnessing pension funds, sovereign wealth assets, and other domestic institutional investors.

Urama, the African Development Bank’s Chief Economist and Vice President for Economic Governance and Knowledge Management, made the remarks in an interview with the News Agency of Nigeria on Tuesday.

He outlined strategies for mobilising long‑term capital to support economic growth, noting that institutional investors across Africa manage roughly four trillion dollars in assets.

Only a small portion of those assets, however, is currently directed toward development financing on the continent.

According to Urama, Nigeria is well positioned to benefit from this capital pool because of its robust banking sector, sovereign wealth fund, pension industry, and expanding financial institutions.

He urged the government to create frameworks that enable national development banks, pension funds, commercial banks, and other financial institutions to invest more effectively in productive sectors.

Urama explained that stronger mobilisation of domestic institutional capital would also attract foreign investors to participate in development projects as partners.

He linked the approach to the New African Financial Architecture for Development, which seeks to improve cooperation among African financial institutions and strengthen the continent’s ability to mobilise and deploy capital at scale.

He highlighted the importance of harnessing diaspora resources, noting that Africans abroad remitted about 104.8 billion dollars to the continent in 2024.

According to him, structured investment instruments can channel a greater portion of these flows into infrastructure, agriculture, education, health, and other productive sectors.

Urama called for greater engagement with high‑net‑worth Africans, stressing that “the continent’s wealthy individuals control substantial resources that can be invested in local economies if appropriate risk‑mitigation and investment frameworks are established.”

He said that deeper domestic capital markets, stronger institutions, and effective risk management are essential to attracting long‑term investment and accelerating economic transformation across Africa.

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