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BUSINESS FOCUS WITH BALEWA ZYUULU
Africa’s financial sector is at a crossroads. As the continent strives to ensure secure and dignified retirements for its citizens, the pension sector in Africa is characterized by significant achievements yet with so many persistent challenges.
In this week’s edition of the Business Focus, we shall share some of the key highlights from the 5th Africa Pension Supervisors Association (APSA) which was hosted by Zambia through Pensions and Insurance Authority (PIA).The conference brought together participants from across Africa and beyond.
In the words of Namakau Ntini, the registrar and chief executive officer of Pensions and Insurance Authority(PIA),”The decisions made today are key in shaping the future for millions who rely on these systems for post-retirement security.
“The journey towards achieving robust and inclusive pension systems in Africa is ongoing and requires collaboration and learning from best practices across the continent.”Mrs Ntini said.
Mrs Ntini who hosted this year’s conference was quick to assure that Zambia had a strong commitment to enhancing the standards of its pension sector, ensuring that policies and practices align with global best practices.
Meanwhile Zambia’s Finance Minister Situmbeko Musokotwane called on pension houses to streamline their processes to facilitate easier access to pensions for retirees.
During the official opening of the Africa Pension Supervisors Association,Dr. Musokotwane expressed concern over the bureaucratic hurdles that retirees face in accessing their hard-earned benefits, deeming them unacceptable.
“The realities of what is happening to retirees are concerning. The bureaucratic hurdles pensioners face in accessing their hard-earned benefits are unacceptable. We must use the available technology as a tool to significantly enhance the efficiency and accessibility of pension services.”Dr. Musokotwane stated.
Dr. Musokotwane emphasized that leveraging technology could transform the pension sector, making processes smoother and more user-friendly for retirees. He highlighted the importance of acting swiftly to implement technological advancements that could revolutionize pension services.
In addition to improving pension access, Dr. Musokotwane pointed out the critical role that pension houses, with their long-term investment potential, could play in revitalizing the economy. He stressed that prudent investments by pension funds could spur economic growth and development.
At the same event, APSA Chairperson Ms. Zareena Camroodien discussed the association’s dedication to advancing pension coverage and developing sustainable solutions tailored to the specific needs of African member countries. She acknowledged the unique challenges faced by African economies, including lower investment returns and reliance on the informal sector, which require innovative and tailored solutions.
“Since its inception, APSA has been dedicated to advancing pension coverage and developing sustainable solutions tailored to the specific needs of African member countries,” Ms. Camroodien said. “From lower investment returns to economies heavily reliant on the informal sector, we require innovative and tailored solutions.”
Ms. Camroodien’s remarks underscored APSA’s commitment to finding creative approaches to pension management that address the diverse economic landscapes across Africa.
Mr Peter Banda, the Board Chairperson of the Pension and Insurance Authority (PIA), also spoke at the conference, highlighting the global economic challenges that have impacted the pension industry. He noted issues such as liquidity problems, currency volatility, low investment performance, and geopolitical matters.
“Despite the positive strides recorded, the pension industry has not been spared from global economic challenges such as liquidity, currency volatility, low investment performance, and geopolitical matters,” Mr. Banda said. “It is important to make prudent investments and construct innovative portfolios to ensure real returns for members.”
Mr. Banda emphasized the importance of secure pension plans, citing evidence that employees with such plans perform better during their working lives by increasing job satisfaction and productivity.
For Zambia’s Minister of Labour and Social Security, Brenda Tambatamba, there is an urgent need to address the myriad challenges facing the continent’s pension systems. Against the backdrop of emerging issues such as climate change, pandemics, and the growing informal sector, Tambatamba stressed the need for a dignified retirement for all citizens.
“The conference comes at a time when we have so many emerging issues as a continent, ranging from the impact of climate change to pandemics and to the growing informal sector space within our economies.The theme of the conference, “Chronicling Africa’s Pension Journey Towards a Dignified Retirement is pertinence to the collective mission of securing financial security for all individuals, regardless of their background or circumstances. “
Ms Tambatamba commended APSA for championing the cause of pension reform and organizing conferences that promote dialogue and solutions. She referenced the report from the 2019 United Nations World Population Prospects, which indicated that 90% of the working-age population in Africa was not saving for retirement and that by 2050, 226 million elderly Africans would face dire poverty without pension benefits.
“This seemingly unfavorable outlook speaks volumes to the amount of work required of all of us here to attain our goal of securing a dignified retirement for all Africans,” she stated.
She also underscored the importance of the National Strategy on Extension of Social Security Coverage to the Informal Economy, which aims to guide stakeholders in extending social security coverage to informal sector workers.
“The strategy is anchored on Vision 2030, which seeks to create a prosperous middle-income country by 2030, and the 8th National Development Plan under the theme ‘Socio-Economic Transformation for Improved Livelihoods,’” Tambatamba explained.
Ms Tambatamba was confident that the implementation of this strategy would contribute to increased access to pensions and other social security benefits for informal economy workers.
Micro pensions emerged as a focal point of interest at the conference, as it was seen as a remedy for coverage challenges in the informal sector, which comprises more than 75% of the labor force.
Ms Tambatamba reiterated the need for continued development and implementation of viable social protection programs that provide decent benefits and well-being in retirement.
“We must continue witnessing the emerging role of African pension funds as the driving force in reshaping economies through financing infrastructure, agriculture, energy, banking, and more,” she said.
“Pension schemes are increasingly stepping in to address some of the challenges in society without compromising their investment targets. This is how it should be if we are to achieve the goal of retirement with dignity and financial security.”she said.
The theme for this year’s conference, “Chronicling Africa’s Pension Journey towards a Dignified Retirement,” reflected the aspirations and endeavors of the continent to provide robust and inclusive pension systems for In conclusion, Africa stands on the brink of transforming its pension systems, ensuring a dignified retirement for all its citizens.
As we reflect on the insights and strategies in this sector,it is imperative that we take decisive action.
Governments, financial institutions, and stakeholders must collaborate to implement reforms, embrace best practices, and drive innovation within the pension sector. Let us seize this moment to build resilient and inclusive pension systems that can withstand challenges and secure the well-being of our retirees.
Together, we can shape a future where every African citizen enjoys a secure and dignified retirement. The time to act is now.
The Author is an Economist and an international award winning journalist.
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