Four things you should know about the growth of African pension funds

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There is near US$350bn of local capital sitting in the African pensions system, according to Rory Ord, head of RisCura’s private equity advisory division.

While around 75% of this is in its most developed pension market, South Africa – estimated at about $258bn – there is strong growth coming from other parts of the continent. These growing funds are being driven by regulatory changes that are bringing more people into the social security system.

“Probably the best example of this is in Nigeria, where regulatory change happened around 2006, and it has managed to accumulate around $30bn of assets since,” Ord noted.

During a recent webcast discussion concerning RisCura’s newly released Bright Africa 2015 report, Ord highlighted a number of interesting points about the growth of African pension funds.

1. In the ‘accumulative phase’

Outside of South Africa and Namibia, most African countries have very low levels of pension penetration rates. This means the strong growth seen in pension numbers is coming off a low base. However, these markets also have a very young population – with the average age across Africa only being around 20 years, compared to 40 in most of the developed world.

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