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Sources of capital on the continent

Pension funds

In line with global trends, most retirement income in Africa is funded by its governments, but pension coverage on the continent remains low compared to the rest of the world.

Pension funds Insurance assets under management in Africa Development finance institutions Banks

Harnessing Africa’s youth and informal sector

Africa’s youthful population and growing middle class are generally considered positive investment themes for the continent. But, will African pension systems be able to serve this youthful cohort when they reach retirement? Africa’s youth will not only age but will also live longer. According to United Nations research, Africa is projected to gain nearly 11 years of life expectancy by 2050, reaching 71 years in 2045 – 2050.

Source:UNDESA Population Division, World population prospects: the 2015 revision, DVD Edition, 2015
 

Source:UNDESA Population Division, World population prospects: the 2015 revision, DVD Edition, 2015
 

Furthermore, one can see that the median age of African countries remains low in comparison to its global counterparts (see figure below). However, the median age of more developed regions, such as South Africa and the Maghreb region, rises favourably when compared to the lesser developed regions in Africa.

The median age of populations across regions

 

Source: CIA World Factbook, RisCura analysis

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Sources of capital on the continent

This section highlights and analyses the main institutional investors on the continent, including the sources of capital and the size and depth of these various pools of capital.

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Insurance assets under management in Africa

The African insurance industry is largely underdeveloped when comparing it to the rest of the world, with its gross premiums written (GPW) accounting for 1.56% of global GPW.

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Development finance institutions

Development finance is critical to meeting Africa’s needs, but access to international financial markets hamper funding of developmental objectives.

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