World Pen­sion Sum­mit: Is­sues that dom­i­nated dis­cus­sions

Daily Trust - - BUSINESS - By Fran­cis Arinze Iloani

Pen­sion ex­perts and stake­hold­ers across Africa and be­yond con­verged on Abuja this week to dis­cuss pen­sion re­forms and man­age­ment in the con­ti­nent.

The two-day WorldPen­sionSum­mitAfrica Spe­cial, be­ing the sec­ond edi­tion con­sec­u­tively held in Nige­ria, brought to the fore is­sues that have been mil­i­tat­ing against the man­age­ment of pen­sion funds, in­vest­ment pit­falls and the need for African coun­tries to ini­ti­ate re­forms that would en­able com­plete tran­si­tion from gov­ern­ment-cen­tred pen­sion li­a­bil­i­ties to the con­trib­u­tory scheme.

Set­ting the tone for the dis­cus­sions, the Di­rec­tor Gen­eral of the Na­tional Pen­sion Com­mis­sion (PenCom), Chinelo Anohu-Amazu, ob­served that there is an emerg­ing con­sen­sus on the con­ti­nent on the ne­ces­sity of in­sti­tu­tion­al­is­ing a pen­sion sys­tem that is ro­bust enough to tackle the plethora of de­vel­op­men­tal chal­lenges that plague Africa in the 21st Cen­tury.

One is­sue that caught the at­ten­tion of del­e­gates was how to draw up the most ap­pro­pri­ate strate­gies for lever­ag­ing pen­sion funds in the con­ti­nent to ex­pe­dite the ex­e­cu­tion of crit­i­cal in­fra­struc­ture projects.

Ex­perts are of the view that in­fra­struc­ture de­vel­op­ment re­mains a key en­abler of sus­tain­able de­vel­op­ment in Africa and the cur­rent rapid in­crease in the size of pen­sion funds avail­able in the con­ti­nent pro­vides a rare op­por­tu­nity for multi-sec­toral col­lab­o­ra­tion in bridg­ing Africa’s in­fra­struc­ture deficit.

In­hissub­mis­sion, the­co­founder and Chair­man of the WorldPen­sionSum­mit, Eric Eg­gink, posited that the en­vi­sioned re­forms for de­vel­op­ing and struc­tur­ing a sus­tain­able pen­sion sys­tem for African na­tions will be a step-by-step ap­proach that will take into ac­count other pri­or­i­ties such as poverty re­duc­tion, fi­nan­cial in­clu­sion and lit­er­acy, and so­cial se­cu­rity.

“Cre­at­ing a new pen­sion struc­ture means that there is time to share the ex­per­tise, learn best prac­tices and put these ‘lessons learned’ into the spe­cific cul­ture of a coun­try,” he stated.

A fi­nance ex­pert, Fiona Stewart, pre­sented a pa­per on ‘Global De­vel­op­ments in pen­sions and Key Chal­lenges for African Pen­sion Sys­tems.’

The pre­sen­ta­tion cen­tred on uni­ver­sal so­cial pen­sion, longevity risks and old age pen­sions.

A case was made for in­creas­ing cov­er­age of the in­for­mal sec­tor work­ers and in­vest­ing pen­sion as­sets pro­duc­tively.

This cap­tured the sit­u­a­tion in Nige­ria where there are ag­i­ta­tions for the in­for­mal sec­tor to be cap­tured in the con­trib­u­tory scheme.

Al­ready, the in­clu­sion of vol­un­tary con­tri­bu­tion in the 2014 Pen­sion Re­form Act has opened the win­dow for in­for­mal sec­tor par­tic­i­pa­tion in the scheme.

The Man­ag­ing Di­rec­tor and Chief Ex­ec­u­tive Of­fi­cer of In­fra­struc­ture Bank Plc, Adekunle Ab­dul­razaq Oyin­loye, ad­vo­cated a wider scope for the in­vest­ment of pen­sion funds.

Par­tic­i­pants at the sum­mit were told that the global trend in­volved steer­ing re­tire­ment and so­cial ben­e­fit man­agers to­wards chan­nel­ing pen­sion funds to in­vest­ments that have so­cio eco­nomic im­pact.

Em­pha­sis was on the ap­pli­ca­tion and in­vest­ment of pen­sion funds to di­ver­sify and boost the economies of African coun­tries.

The Head of Cor­po­rate De­vel­op­ment of Quan­tum Global Cor­po­rate Ser­vices, Frank Be­hi­blo, dwelt on the need for long-term in­vestors to help fi­nance ac­tiv­i­ties that should help sup­port high growth and sus­tain­able de­vel­op­ment.

It was agreed that for that to hap­pen, Africa has to close the huge in­fra­struc­ture gap, ex­ti­mated at 93 bil­lion per year by the World Bank for the next 10 years.

There was con­cen­sus that for such in­vest­ments to hap­pen, there has to be a con­nec­tion for both public and pri­vate fi­nanc­ing for in­no­va­tive fi­nanc­ing model.

An ex­pert on mi­cro pen­sion, Ger­ard Bergsma, made a case for es­tab­lish­ment of mi­cro pen­sion prod­ucts in Africa.

A mi­cro pen­sion is a scheme de­vel­oped for peo­ple with low in­come in de­vel­op­ing coun­tries.

Af­ter much at­ten­tion had been paid to re­forms and diver­si­fi­ca­tion of pen­sion as­sets in­vest­ments, at­ten­tion shifted to in­vest­ment risks.

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