Dar es Salaam. Africa is moving to overhaul its pension systems in a historic shift aimed at bringing informal workers, who make up the overwhelming majority of the continent’s labour force, into retirement savings schemes through digital micro-pension platforms.
The decision was reached during the All-Africa Pension Summit held at the Speke Resort Convention Centre in Kampala, where pension fund heads, government representatives and multilateral institutions agreed that pension reform in Africa can no longer focus solely on investment returns.
Instead, the priority must be expanding pension access to those who have been locked out because they do not have formal employment contracts or predictable monthly incomes.
According to data presented by United Nations Development Programme (UNDP) Assistant Secretary-General Ahunna Eziakonwa, Africa holds between $700 billion and $1 trillion in pension assets.
However, only 6.1 percent of working-age Africans and 8.9 percent of the continent’s entire labour force contribute to a pension scheme.
She said this makes Africa the world’s least pension-covered region, despite having a youthful and rapidly expanding workforce.
“Pensions in Africa must not be a privilege for the few with formal employment,” she said. “We should design systems that allow informal workers to save flexible amounts that match how they earn.”
Eziakonwa said that informal workers — including market traders, boda boda riders, small-scale farmers and domestic workers — are excluded not because they lack the will to save, but because pension systems were designed for people with fixed monthly salaries.
She told participants that new pension models need to match the reality of informal workers whose earnings fluctuate daily or weekly, and whose financial lives are centered on mobile money transactions rather than bank accounts.
She said digital micro-pension platforms will allow workers to save any amount, at any time, through their phones.
According to UNDP estimates shared during the summit, micro-pension systems could unlock between $10 billion and $14 billion annually from informal-sector savings.
Eziakonwa added that Africa’s pension challenge is not only low coverage, but also the lack of diversity in how pension funds are invested.
Pension funds, she said, remain conservative, with more than 80 percent of assets in some markets invested in government bonds instead of higher-impact sectors like infrastructure or climate-related projects.
“African pension funds offer long-term patient capital,” she said. “But if only a small percentage of workers contribute to these funds, we are limiting our potential before we even start.”
The summit heard that pension assets are concentrated in a few countries. South Africa alone accounts for between 40 and 50 percent of Africa’s total pension assets, valued at around $347.2 billion. Nigeria, Kenya and Botswana follow at a distance.
According to UNDP, pension funds globally hold about $60 trillion in assets, meaning Africa contributes less than two percent of global pension capital.
Uganda’s Minister of Finance, Planning and Economic Development, Matia Kasaija, said African governments must recognise that expanding pension access is a development strategy.
“We are committed to policy reforms that unlock pension capital as a catalyst for inclusive and sustainable growth,” he said.
Kasaija said Uganda is currently transitioning its public service pension scheme into a contributory system to ensure sustainability and intends to widen pension access to include self-employed and informal workers.
He told delegates that pension reforms are aligned with Uganda’s National Development Plan IV, which prioritises industrialisation, job creation, science, technology and innovation.
Uganda reported that real GDP grew to 6.3 percent in the 2024/2025 financial year, up from 6.1 percent the previous year.
Inflation remained below 5 percent, and the poverty rate is projected to fall to 56 percent from almost 60 percent recorded in 2020.
Kasaija emphasised that the expansion of pension coverage would deepen domestic savings and reduce reliance on external borrowing.
“We must implement, not just discuss,” he said. “Let us meet again in 2027 to present progress, not ideas.”
Ugandan President Yoweri Museveni, who officially closed the summit, challenged African governments to stop depending on foreign financing and instead use domestic resources to fuel development.
He said Africa’s historical problem has never been a shortage of natural resources or labour, but the lack of capital.
“Africa has always had land and labour,” he said. “What we have lacked is capital. Pension funds offer the capital we need. We should use our own resources to address the infrastructure gaps that undermine the growth of businesses.”
Museveni said Uganda’s National Social Security Fund (NSSF) has demonstrated that pension money can be used for development after it invested in renewable energy and housing projects.
He told delegates that African countries must move beyond simply building infrastructure to ensuring that such infrastructure enables citizens to create wealth.
He stressed that infrastructure by itself is not enough if Africans do not use it to generate income.
“Development alone is not enough. It must lead to wealth creation for households,” he said.
During the summit, Eziakonwa highlighted examples of ongoing reforms. South Africa has recently introduced a “Two-Pot” pension system allowing contributors to access part of their savings before retirement while protecting long-term reserves.
South Africa’s Public Investment Corporation has invested over $800 million in renewable energy, contributing more than 2,000 megawatts of power.
Nigeria’s pension fund reforms, which have accumulated over ₦22.8 trillion (approximately $14.2 billion), have enabled investments in infrastructure, power generation and healthcare. Kenya has introduced micro-pension schemes that allow informal workers to save via mobile-based platforms.
All commitments and outcomes reached during the summit were captured in the Kampala Declaration, a framework that outlines shared priorities across African pension authorities.
The declaration includes commitments to adopt digital pension platforms, expand pension coverage to informal workers, and harmonise regulations that restrict pension funds from investing across borders.
In addition, the Declaration establishes an Implementation Working Group and a monitoring system that allows participating countries to track progress.
Eziakonwa, however, in her address she stressed that the success of the reforms will depend on political will.
“We must build systems where retirement security fuels national prosperity,” she said.
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