The National Pension Commission (PenCom), has said it would continue to promote the investment of pension funds within Africa in line with the vision and ideals of the African Union.
Mrs. Chinelo Anohu-Amazu, the Commission’s Director-General, made the call in Addis-Ababa, Ethiopia, Friday, while addressing participants at the 3rd International Conference on Financing for Development.
According to her, investing pension funds within the African continent would go a long way in achieving the African Union’s (AU) long term economic development plan tagged, Agenda 2063.
The AU Agenda 2063 is a vision and action plan for all segments of African society to work together to build a prosperous and united Africa based on shared values and common destiny.
She said that PenCom hoped to raise the number of workers covered under the Contributory Pension Scheme (CPS) from 6.5 million in 2015 to 20 million by 2019, using the Micro-pension initiative.
Anohu-Amazu said that the AU is expected to translate this vision and ideals into concrete objectives, milestones, goals, targets and actions.
This, she said, would enable Africa remain focused and committed to the ideals envisaged in the context of a rapidly changing world.
She explained that, in operational terms, the Agenda 2063 would be a rolling plan of 25 years, 10 years, 5 years and short term action.
Speaking on the topic: “Leveraging Pension Funds for Financing Infrastructure Development in Africa,” she said PenCom was committed to promoting the investment of accumulated pension fund assets within the continent.
“PenCom is committed to promote sustainable pension fund investments on the African continent and welcomes the AU Agenda 2063 as well as the Programme for Infrastructure Development (PIDA).
It would project same through the annual World Pension Summit (WPS) ‘Africa Special’ in collaboration with the WPS Amsterdam,” Anohu-Amazu said.
She expressed dissatisfaction with the Contributory Pension Scheme, specifically with the level of coverage of the scheme eleven years after it was established.
The Director-General, however, expressed the hope that the Commission would raise the coverage using the Micro-pension initiative, which it planned to launch very soon.
“The current position of 6.5 million contributors is low relative to estimated working population.
“There is plan to expand it to at least 20 million by 2019 through Micro Pensions.
“This is pertinent also due to inadequate social safety nets. This is a Pan-African issue that should provoke ideas sharing,” Anohu-Amazu said.
She asserted that the Nigerian pension reform represents a major action in Domestic Revenue Mobilisation (DRM).
She said this was an AU policy that stemmed from the realisation that Africa should take responsibility and indeed possess the resources, if properly mobilised, for its own economic development.
This reform entails mobilising funds which hitherto were untapped, she stressed.
“Applying these pension funds to economic development is being pursued through initiatives on infrastructure and real estate investments domestically.
“There is also ample room in the near future for same to be extended to viable African investments,” she assured.
The Director-General stated that insufficient knowledge, skills of Pension Fund administrators in conducting due diligence on specialised investments such as infrastructure and private equity was also a big challenge.
Therefore, she said, the Commission encouraged mutually beneficial relations between pension funds and the private sector through its consultative approach to industry governance and promotion of new investment outlets.