Investment experts have commended the National Pension Commission for approving Pension Fund Administrators’ investment of pension assets in the planned Initial Public Offering of Dangote Petroleum Refinery and Petrochemicals.
The experts spoke in separate interviews on Tuesday. They said the development would deepen the capital market, boost long-term investments and provide pension contributors opportunities to participate in one of Africa’s largest industrial projects.
Speaking on the development, David Adonri, vice-president of Highcap Securities, described the planned IPO as a major investment opportunity capable of creating enormous wealth for investors.
According to him, the refinery has become a critical driver of the Nigerian economy with strong long-term value creation potential.
“Dangote Refinery is a critical factor in the Nigerian economy. It is an African champion. The capacity of the enterprise to build wealth into the future is extraordinary. This makes it an investment that every asset manager all over the world would wish to have,” he said.
Mr Adonri said the special dispensation granted by PenCom reflected the commission’s confidence in the refinery’s investment prospects and its determination to ensure pension contributors benefit from the anticipated returns.
“This underscores the special dispensation given to the pension industry by PenCom to key in early and share in the wealth Dangote Refinery is expected to create. It is an opportunity that PenCom does not want the pension industry to miss,” he said.
Aronkola Isaac, principal assistant registrar in charge of the Pension Desk Office at Obafemi Awolowo University, described the development as positive for pension contributors and the economy.
Mr Isaac said the refinery, being a multi-product industrial venture, had strong capacity to generate returns and grow investors’ funds.
“Apart from the huge returns to investors, it should be noted that the sector is strategic and ownership should largely remain in the hands of Nigerians. Therefore, I support the PenCom directive,” he said.
Similarly, pension consultant Ehimeme Ohioma said PenCom made the right decision by allowing PFAs to participate in the IPO.
He noted that it would have been a disservice to Retirement Savings Account holders if pension fund managers were prevented from investing indirectly in what he described as the world’s largest single-train petroleum refinery.
“It will be undesirable and a huge disservice for RSA holders not to have indirect equity investments in the biggest single-train petroleum refinery in the world if PFAs are not allowed to invest in the IPO,” Mr Ohioma said.
(NAN)
