Lagos, Nigeria – Nigeria’s pension assets, now exceeding N20 trillion (approximately $12.8 billion) , could play a transformative role in addressing the country’s estimated 20 to 28 million housing deficit, according to industry experts.
Okay News reports that data from the National Pension Commission shows total net pension assets crossed the N20 trillion mark as of late 2025. Analysts argue that a carefully structured reallocation of a small portion of these long-term funds into housing instruments could unlock large-scale affordable home development. Currently, less than three percent of total pension assets are invested in real estate-related instruments, with most funds concentrated in Federal Government securities, money market instruments, and equities.
Housing advocates say pension funds are structurally suited to finance long-term housing projects, provided risks are properly managed. Lanre Bakare, a Lagos-based macroeconomic analyst, noted that if just five percent of pension assets—roughly N1 trillion—were channelled into well-structured housing instruments, it could finance hundreds of thousands of homes. Architect Simeon Kemakolam, CEO of Grand Spaces Architects Limited, said financing remains the real bottleneck, with developers borrowing at double-digit rates that push house prices beyond affordability for most Nigerians.
With mortgage financing still shallow and commercial lending rates above 25 percent, developers say access to affordable, long-tenor capital remains the biggest barrier to scaling housing supply. Nigeria’s mortgage market is one of the shallowest globally, with a mortgage-to-GDP ratio of about 0.5 percent, far below peers such as Kenya at 2.2 percent, Tunisia at 10.2 percent, and South Africa exceeding 30 percent. High interest rates and short loan tenors have constrained mortgage expansion, while limited refinancing mechanisms reduce banks’ appetite for long-term housing loans.
Pension funds, given their long-dated liabilities, are structurally aligned with housing finance instruments such as mortgage-backed securities, housing infrastructure bonds, and real estate investment trusts that require 10- to 25-year capital commitments. Theodore Omokpo, chief executive of Dornesi Projects, said with the right guarantees and governance framework, pension assets can safely support large-scale housing delivery without compromising contributors’ funds.
Economists say unlocking pension capital for housing could generate macroeconomic gains beyond shelter provision. The construction sector has one of the highest employment multipliers in the Nigerian economy. Large-scale housing development would stimulate demand for cement, steel, paints, and other building materials, while small and medium-sized enterprises linked to construction could see increased activity. Dr. Afolabi Yusuf, a Lagos-based development economist, said every 100,000 housing units built could create hundreds of thousands of direct and indirect jobs.
However, labour groups urge caution, stressing that pension savings are retirement funds, not intervention capital. Emeka Okoye, a Lagos-based civil servant and pension contributor, warned against risking pensioners’ money on poorly structured projects. Against this backdrop, pension capital stands out as one of the few viable domestic funding sources capable of transforming Nigeria’s housing finance landscape, provided governance, risk management, and liquidity protections remain firmly in place.
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