PENSION INVESTMENT AND FINANCIAL EFFICIENCY IN NIGERIA

The purpose of this study is to evaluate the effect of pension investment on financial efficiency in Nigeria. The study adopted an expost facto research design. The population of the study is 14 years of Nigeria’s economy from the year 2007-2020. Timeseries data were sourced for this study which are entirely secondary data from the Pension Commission and the Central Bank of Nigeria (CBN) statistical bulletin, and the World development indicator (WDI) of the World Bank Database. Autoregressive Distributed Delay Limitation (ARDL) bounds testing approach was adopted to examine the long and shortterm relationships between the series, using Eviews version 12. The longrun results show that there is evidence that pension investment in equities and mutual funds have a positive relationship with financial efficiency. This implies that increases in pension investment in equities and mutual funds will lead to an increase in financial efficiency in Nigeria. Conversely, there is evidence that pension investments in FGN securities and local money market securities have a negative relation with financial efficiency, thus increases in pension investments in FGN securities and local money market securities will lead to a fall in financial efficiency. However, the result of the shortrun model shows that pension investments in equities and local money market securities have a positive relationship with financial efficiency, while pension investment in FGN securities and mutual funds have a negative relationship with financial efficiency. The study suggested that financial sector efficiency can only be achieved through pension investment if the investments enable economic resources to be allocated to their best use across time and space without imposing unnecessary cost or rents on households and businesses.