The latest Bright Africa Pensions research highlights how African demographics are evolving and the impact of this on long-term savings.
Pensions industry progress underway
Regulators are reviewing legislation, governments are experimenting with unique solutions such as micro-pensions, asset allocations are changing to allow for greater long-term growth and across the continent, the high rate of mobile penetration is being viewed as a significant opportunity to innovate.
A major issue African governments face is that 85.5% of their working population are informally employed. To avert fiscal and social stress, policymaking on pensions and social security in Africa needs to quickly move to enable affordable, convenient, and secure micro-pension products to be established.
The composition of African long-term assets mimics the global picture, where a few countries claim the largest proportion of long-term savings. In Africa, 95% of the assets are concentrated in South Africa, Nigeria, Kenya, Namibia, and Botswana.
For the selected pension funds within this report, South African, Botswanan, and Namibian asset allocations continue to reflect greater allocations to equities, more so than OECD countries. For the rest of the African countries, the picture continues to illustrate a skew to fixed income.