For many Nigerians, retirement is supposed to signal a time of rest and enjoyment. Yet, the country’s stubbornly high inflation is making that dream harder to achieve, leaving retirees and workers-in-waiting with a sobering reality: pension savings alone are no longer enough.
Inflation eats into retirement savings
Even with the protection of the Pension Reform Act (2014), many workers discover that their Retirement Savings Accounts (RSAs) fail to provide adequate income. A retiree with N20 million saved by age 65 may receive between N150,000 and N180,000 monthly — barely N5,000 to N6,000 a day. The bigger challenge is that most workers never accumulate that much; those earning N100,000–N250,000 monthly typically retire with just N7–N15 million, translating to payouts of only N50,000–N120,000.
With food, healthcare, and utilities climbing steadily in cost, the gap between pensions and actual living expenses is widening.
Why pensions alone fall short
Risk-free instruments like treasury bills and bonds — long considered the safe haven for retirees — now struggle to keep pace with inflation. Analysts say the only sustainable way forward is for retirees to look beyond RSAs and embrace investments that can both preserve and grow their wealth.
Dividend stocks step into the spotlight
Equities on the Nigerian Exchange (NGX) are gaining attention, especially dividend-paying stocks. These investments provide two key advantages: consistent dividend income and potential price appreciation.
By mid-2025, nearly 100 stocks on the NGX had delivered inflation-beating returns, with over 20 of them maintaining reliable dividend payouts for at least five years. Companies from multiple sectors — banking, cement, energy, agriculture, and manufacturing — make up the list.
Where the opportunities lie
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Banks remain dominant. Zenith Bank, GTCO, UBA, Fidelity Bank, and Access Holdings have collectively posted trillions in profits over the last five years, growing earnings between 35% and 59% annually. Their financial strength allows them to pay — and sustain — attractive dividends.
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Cement giant Dangote Cement continues to reward investors, distributing N30 per share in both 2023 and 2024, supported by nearly N2 trillion in free cash flow.
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Seplat Energy offers an edge through quarterly dividend payments and dollar-based earnings, which protect against Naira depreciation.
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Agro-allied players like Okomu Oil and Presco have built a track record of stable returns, making them reliable options for diversification.
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Beta Glass has emerged as a quiet outperformer, delivering strong free cash flow and rallying sharply in 2025.
Quality, not just yield
Experts caution that not every dividend stock is suitable for retirement planning. High yields mean little if the payouts are unsustainable. Investors are urged to focus on companies with healthy free cash flow, stable earnings, and a consistent history of rewarding shareholders.
The bottom line
For Nigerians hoping to retire comfortably, pensions alone may no longer be enough. A carefully selected portfolio of dividend-paying stocks could provide the extra cushion needed to maintain a decent standard of living in a high-inflation economy. The challenge is no longer just about saving, but about investing wisely — with an eye on sustainability and growth.
