Africa’s $700bn pension funds now eye joint development kitty

Against this backdrop, the continent’s pension providers are preparing to commit to a “Development Fund for Africa” at the “$700bn in 1 Room” All Africa Pensions Summit, scheduled from November 5 to 7 at the Munyonyo Convention Centre in Kampala, Uganda.

Hosted by NSSF Uganda, the summit will be held under the theme, ‘Pension Funds – Powering Africa’s Growth’.

Its agenda focuses on deepening patient capital pools, strengthening partnerships, enhancing social impact and positioning pension funds as catalysts for infrastructure development.

“Pension funds across Africa hold about $700 billion in assets under management. This is a major opportunity for Africans to catalyse our own economies by providing funding that is not tied to unfavourable conditions from foreign donors,” said Mr Patrick Ayota, managing director of NSSF Uganda, East Africa’s largest fund valued at over $7 billion.

Mr Ayota emphasised that the realignment of global geopolitics has rendered traditional foreign funding insufficient to meet Africa’s expanding infrastructure requirements.

“By setting aside just one per cent of the assets held by African pension funds, we are looking at $7 billion. Two per cent translates to $14 to $20 billion – a substantial resource that could drive meaningful development across the continent,” he said.

United Nations Resident Coordinator for Uganda Leonard Zulu called for Africa to look inward and mobilise domestic savings, diaspora remittances and blended financing models.

“The traditional models of development cooperation are being redefined. Official development assistance, though important, is no longer sufficient to meet the scale and complexity of challenges we face. Declining aid flows, shifting geopolitical priorities and funding uncertainties make it vital to develop innovative domestic financing solutions to support national development strategies while fostering resilience and sustainability,” he said.

He noted that fifteen of the continent’s twenty traditional donor partners have reduced funding, underscoring the urgency for African nations to shift from aid to trade, enabling small and medium enterprises (SMEs) to access capital crucial for achieving national goals.

For his part, Africa Social Security Association (ASSA) secretary general Meshach Bandawe highlighted that African infrastructure funding must increasingly be addressed by Africans themselves.

“Pension funds are increasingly recognised as critical levers for inclusive development and can unlock long-term capital for infrastructure, agriculture, climate change mitigation and social impact initiatives,” he said.

According to ISSA, Africa has 51 pension and social security funds. Several, including Tanzania’s NSSF, have already demonstrated the potential of locally mobilised capital in development projects.

“The time is ripe for African pension providers to coalesce around this approach. With foreign funding sources drying up, there is no better moment than now to harness domestic capital for the continent’s development needs,” Mr Bandawe added.

The summit has attracted CEOs of pension funds, chief investment officers, global investors, development finance institutions (DFIs), venture and private capital firms, policymakers and government officials from across Africa and beyond.

East Africa Private Equity and Venture Capital Association chairperson Amanda Kabagambe explained the complementary role of private equity in infrastructure.

“There’s a role for governments and long-term players to fund infrastructure because private equity and venture capital typically do not have capital for projects spanning 15 to 20 years.

These funds are more aligned to projects where risk, liquidity and return timelines are shorter. But private equity can directly participate in infrastructure developed by DFIs, complementing their investments,” she said.

The summit will also examine ways to expand pension coverage and deepen capital pools. Many Africans, particularly in the informal sector, save in livestock or land rather than formal financial instruments. Pension funds aim to convert these savings into investable capital, thereby increasing domestic long-term savings.

“African countries still have savings in the low teens as a percentage of GDP, compared with Asian tigers such as South Korea, Singapore and Malaysia, where domestic savings reach 25 to 27 per cent. By mobilising and pooling our savings, Africa can fund its own development rather than relying on external partners,” Mr Ayota said.

The summit will showcase examples of pension funds catalysing infrastructure projects. In Tanzania, the NSSF contributed significantly to the construction of the Jemoni Bridge. In Ethiopia, local capital funded the Gadd Dam.

In Uganda, NSSF is involved in the Kampala-Ginja Expressway project. By pooling resources, African pension funds could fund multiple major projects across the continent.

A regional task force has already been established by six East African pension funds to explore cross-border investment opportunities. Regulatory barriers are minimal between Tanzania, Kenya and Uganda, leaving political considerations and risk diversification as primary factors for investment decisions.

“Diversification protects members’ savings. For example, political risks differ between countries. By investing across East Africa, funds can mitigate these risks while ensuring better returns for their members,” Mr Ayota explained.

Social impact investments will also be a focus. Rwanda’s RSD has extended healthcare coverage to over 94 per cent of its population. NSSF Uganda is implementing borderless education initiatives to ensure equitable access for children across national boundaries.

Pension funds can also strengthen public-private partnerships in agriculture, support start-ups and finance research and development.

Mr Zulu emphasised that Africa is not poor. With $57 billion in private savings and $100 billion in remittances, the continent has sufficient domestic resources to become its own development agent.

“The All-Africa Pension Summit will lay the foundation for a continental discussion on how Africa’s $1.3 trillion in pension assets can be strategically leveraged to drive inclusive growth, sustainable infrastructure and social protection,” he said.

The summit is expected to be attended by the President of Uganda, CEOs from across Africa, international organisations including the World Bank, United Nations Development Programme, African Development Bank, East African Development Bank and venture capitalists.

NSSF Uganda is leading the initiative, encouraging collaboration and shared learning among African pension providers.

“The goal is to transform African pension funds from mere financial institutions into powerful engines of development. By investing domestically, we reduce reliance on foreign aid, minimise currency risks and mobilise capital that can be reinvested in local economies,” Mr Ayota said.