Abstract

This study examined the effect of pension funds investment on economic growth in Nigeria. Ex-post- facto research design was used in the study. Time series data were collected from Central Bank of Nigeria Statistical Bulletin and National Pension Commission (NPC) from 2007 – 2023. The collected data were analyzed by descriptive statistics, correlation analysis and unit root test; while Autoregressive Distributed Lag (ARDL) was used to estimate the model. The proxy for the independent variable, pension funds investment were public sector pension investment, private sector pension investment, money market securities and mutual funds. Similarly, the proxy for the dependent variable, economic growth was gross domestic product. The findings indicated that public sector and private sector pension fund investments have positive but statistically insignificant effects on Nigerian economic growth. Investment in money market securities also showed a negative and insignificant relationship with GDP, highlighting the limited impact of short-term financial instruments on long- term growth. However, mutual fund investment has a statistically significant negative effect on GDP, implying that this category of pension fund allocation may have been poorly utilized or misaligned with growth-oriented sectors. The study recommended that Nigeria Pension Commission and government agencies should improve the management of pension funds by directing more resources towards infrastructure, industrial projects, and other long-term investments that drive economic growth.