ROLE OF PENSION FUND IN NON-OIL INVESTMENT IN NIGERIA
Timothy Terwase Nev, Funsho Idowu Obakemi and Sesugh Uker
Volume 7 Issue 1
Abstract
The contributory pension scheme in Nigeria which its assets has risen from N5.302 trillion in 2015 to N6.164 trillion in 2016 reflecting a significant growth of 16.25% (NBS, 2016) has avail a good opportunity of investible funds for non-oil investment of the economy. This study examined the impact of contributory pension fund on nonoil investment in Nigeria spanning over the period 2007Q1 to 2016Q4. The study employed Augmented Dickey Fuller (ADF) and Phillip Perron Unit Root Tests, and Bound testing Co-integration test, as pre-estimation technique. ARDL model was employed to estimate both long run and short run coefficients. The study conducted residual diagnostic tests; using Breusch-Godfrey test for serial correlation, Breusch-Pagan-Godfrey test for heteroskedasticity and Jarque-Bera test for normality test. The findings in long run model, shows that Pension fund (PNF) and GDP growth rate (GDPgr) are significant and have positive impact on non-oil investment in Nigeria, and nevertheless, the coefficients of market capitalization (MCAP) and real effective exchange rate (REER) were negative and significantly influence non-oil investment within the period. The study therefore, concludes that with good risk and portfolio management by pension fund administrators and custodians, the contributory pension has the capacity to boost the non-oil investment of the Nigeria economy especially in the long run. Keyword: Pension Fund, Non-oil Investment, Capital Market, Accelerator Theory & ARDL Model.
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