Title: The political economy of pensions

Authors: Adeoye Afolabi; Aida Sy

Addresses: Department of Economic and Management Studies, School of Social and Management Sciences, Afe Babalola University, PMB 5454 Ado-Ekiti, Nigeria ' Critical Accounting Projects Inc., New York, USA

Abstract: The paper assesses the success and challenges of pension industry in Nigeria, as a result of various reform that taken place. We find that the Pension Reform Act (PRA) 2004 make it possible for the industry to grow. However, the activities of the regulators of the industry are making it difficult for the pension industry to achieve is mandate. The empirical evidence shows that there is a positive relationship between contributory pension scheme (CPS) and gross domestic product (GDP). This result suggests that contributory pension scheme (CPS) have positive impact on the economy of Nigeria. Thirdly, we find that the respondents from stakeholders of the pension industry indicate that there is transparency and accountability in the financial reporting of the pension industry, operational and market risk affect pension fund management and return on pension fund. We recommend that the risk assessment should be improved upon in the area of pre-investment risk appraisal. This will help to guide against economic and political risks that are prevalent in an emerging economy of ours in Nigeria.

Keywords: Pension Reform Act; PRA; contributory pension scheme; CPS; gross domestic product; GDP; operational risk; political economy; pensions; pensions industry; Nigeria; transparency; accountability; financial reporting; market risk; pension fund management; return on pension funds; risk assessment; pre-investment risk appraisal; economic risks; political risks; emerging economies.

DOI: 10.1504/AJAAF.2015.072217

African Journal of Accounting, Auditing and Finance, 2015 Vol.4 No.2, pp.107 - 120

Received: 07 Apr 2015
Accepted: 07 Apr 2015
Published online: 05 Oct 2015 *

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