The Funded Pension Scheme and Economic Growth in Nigeria

Adesoji Farayibi

MPRA Paper from University Library of Munich, Germany

Abstract: This study provided evidence on the effect of the operation of the funded pension scheme since its inception in 2004 on economic growth in Nigeria using error correction mechanism (ECM) and Ordinary Least Square (OLS) methodologies. Findings revealed that the pension fund contributions from both private and public sectors in Nigeria increased greatly and constituted a huge investment fund in the capital and money markets. This increased liquidity in the economy and created employment opportunities as well as improvement in the investment climate. The study concluded that with good risk and portfolio management by pension fund administrators and custodians, the contributory pension has the capacity to boost the Gross Domestic Product (GDP) in Nigeria and very convenient to retirees compared to the previous defined benefit scheme. The study however recommended the removal of delay payment, administrative bottlenecks and corruption in the management of the pension fund in order to boost economic growth in Nigeria.

Keywords: Funded Pension Scheme; Economic growth; Portfolio management; ECM; Nigeria (search for similar items in EconPapers)
JEL-codes: H0 H30 H5 H55 (search for similar items in EconPapers)
Date: 2016-09-07
New Economics Papers: this item is included in nep-age and nep-sog
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:73613

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