Africa’s pension funds can be quite handy
In Africa, there has been the emergence of an ecosystem built around pension funds. A recent institutional investor study estimated that the ten largest funds in Africa held a combined $310 billion in assets.
This has transpired for a number of reasons, not least being the fact that many of these countries are switching from defined benefits to defined contribution schemes. In Botswana, where the shift took place in 2001, there are more than 100 pension funds jostling for funds in a country that has a population of 2 million. The top ten funds account for more than 80 per cent of the assets accumulated, a figure similar to other countries in the continent as well.
Yet what is clear is that these countries have been good at amassing capital rather than deploying it, the shallow nature of the domestic markets being a decisive factor. In Ghana, there are less than 50 companies listed, and average daily volumes have shrunk in the last couple of years.
Read More: Gulf News
