Abstract

The study examined the effect of pension fund investment on financial sector growth in Nigeria. The ex-post facto research design was adopted for the study. The study used financial sector growth, with its proxy as gross domestic product (GDP) of the financial sector. Also, the independent variable was pension fund investment, with its proxies as public sector pension investment, private sector pension investment, money market securities, and mutual funds. Annual Time series secondary data were obtained from Pension Commission, Abuja for the period, 2007 to 2022. The method of data analysis employed in this study includes descriptive statistics, correlation analysis and unit root test. Augmented Dickey Fuller‘s unit root test was conducted to avoid spurious regression results. The Vector Autoregressive (VAR) model was used to estimate the model. Based on the analysis, the findings revealed that public sector investment significantly influences the growth of the financial sector in Nigeria, while private sector investment and money market securities do not show significant effects. However, mutual funds have a significant impact on the growth of the financial sector. The study recommended that: the significant influence of public sector investment on the growth of the financial sector in Nigeria, policymakers should keep increasing investment and utilization of public funds; and since private sector investment does not show a significant effect on the growth of the financial sector in Nigeria, policymakers should focus on creating an enabling environment for private sector participation