Assets under management

The Organisation for Economic Co-operation and Development (OECD) records pension assets amounting to USD 38tn in 2016 in OECD countries. The US continues to be the largest market at USD 25tn (66%) of OECD countries with the Canada and the UK at USD 2.4tn and USD 2.3tn respectively; these three countries account for more than 78% of total pension assets in the OECD.

Pension fund assets globally are on the increase as countries move from unfunded to funded (or partially funded) status, and as many outsource pension fund management to private firms and move from defined benefit to defined contribution schemes.

A common measure used to equate the significance of pension assets to a country’s economy is the pension assets-to-GDP (Gross Domestic Product) measure. In OECD countries, on average, these assets-to-GDP measures increased from 37% in 2006 to 50% in 2016. In the non-OECD jurisdictions, these measures also recorded an improvement, from 12% to 20%.

In global terms, the proportion of Africa’s pension assets remains relatively small. Promisingly for Africa’s unfolding economic development, African pension systems are in reform. While the assets in African pension funds are still relatively small, the pace and direction of regulatory reform now taking place in Africa speaks to a common purpose, and pension systems therefore cannot fail in contributing to two equally important goals, funding retirement and contribution towards the development of the continent’s economy and capital markets.

A sub-set of African countries is depicted below where the measure of asset-to-GDP ratio depicts the variation in the development of pension systems and economic development across the continent.

Region	Country	Year	Currency / Code	AUM (LCL) [Million]	AUM (USD) [Million]	GDP (IMF 2016) [Billion]	GDP (IMF 2016) [Million]	AUM as % GDP
East Africa	Kenya	2016	Kenyan Shilling [KES]	1 080 000	$10 701,0	USD 68,92	USD 68 919	16,0%
	Rwanda	2015	Rwandan Franc [RWF]	633 791	$735	USD 8,41	USD 406	9,0%
	Tanzania [including Zanzibar]	2015	Tanzanian Shilling [TZS]	11 208 861	$4 927	USD 47,18	USD 184	10,0%
	Uganda	2016	Ugandan Shilling [UGX]	6 531 508	$1 713	USD 26,20	USD 195	7,0%
Egypt	Egypt	2016	Egyptian Pound [EGP]	48 300	$2 705	USD 332,35	USD 332 349	1,0%
Nigeria	Nigeria	2016	Nigerian Naira [NGN]	6 078 000	$16 837	USD 405,95	USD 405 952	4,0%
Other East Africa	Seychelles	2016	Seychellois Rupe [SCR]	2 637	$189	USD 1,41	USD 1 405	13,0%
Other West Africa	Ghana	2015	Ghanaian Cedi [GHS]	12 628	$2 870	USD 43,26	USD 43 264	6,6%
South Africa	South Africa	2016	South African Rand [ZAR]	4 035 825	$306 653	USD 294,13	USD 294 132	104,0%
	Swaziland	2015	Swazi Lilangeni [SZL]	22 842	$1 721	USD 3,77	USD 3 770	45,7%
Southern Africa [excl. SA]	Botswana	2016	Botswana Pula [BWP]	72 847	$7 191	USD 15,02	USD 15 018	48,2%
	Mauritius	2015	Mauritian Rupee [MUR]	154 300	$4 604	USD 11,95	USD 11 950	38,5%
	Namibia	2016	Namibian Dollar [NAD]	137 462	$10 497	USD 10,65	USD 10 646	99,0%
	Zambia	2016	Zambia Kwacha [ZMW]	5 798	$567	USD 21,31	USD 21 310	3,4%
Total					371 911		1 290 500	29,0%

RisCura estimates pension fund assets in Africa to be USD 372bn, representing only 29% of the above-mentioned countries’ GDP. Similar to the global picture, there is a large country bias present in Africa, with 90% of the assets concentrated in Nigeria, South Africa, Namibia and Botswana. Within these countries a few large funds also tend to dominate. Examples include Government Employees Pension Fund (GEPF) in South Africa, Government Institutions Pension Fund (GIPF) in Namibia, Botswana Public Officers Pension Fund (BPOPF) in Botswana and a few larger vehicles in Nigeria.