National Pension Commission (PenCom) has authorised Pension Fund Administrators (PFAs) to invest pension fund assets in the Initial Public Offering (IPO) of Dangote Petroleum Refinery & Petrochemicals FZE. The approval comes via a circular signed by Abdulrahman Saleem, Director of PenCom's Surveillance Department, and addressed to all licensed pension fund operators. It takes immediate effect. PenCom said the decision followed a review of a request for special dispensation, considering the refinery's strategic importance, strong fundamentals, growth potential and expected economic benefits. The commission also cited the track record of Dangote Industries Ltd., the majority shareholder in the refinery firm. The approval grants a waiver from Section 6.2.7.1 (iii) of the Revised Regulation on Investment of Pension Fund Assets, specifically on requirements for existence, profitability and dividend history. Other regulatory safeguards remain unchanged. PenCom directed PFAs to ensure all investments under this dispensation align with their internal investment policies, risk management frameworks and fiduciary duties to contributors and retirees. The commission described the move as exceptional, one-off and strictly limited to the Dangote Refinery IPO. It stressed that the approval must not be taken as a precedent for future IPOs or investment transactions.
PenCom grants a one-off waiver for pension funds to invest in Dangote Refinery's IPO while citing Dangote Industries' track record, despite the refinery entity itself lacking a profitability history. This creates a contradiction between the waived rules and the justification for the waiver. The move exposes pension contributors' funds to untested project risk under the same regulations meant to protect them. Retirees now depend on the performance of a refinery that has not yet proven its operational or financial stability.
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