‘Pension Policies in Africa Must Remain Efficient, Sustainable’
Monday, 14 July 2014 00:00
Written by EDITOR
Nigerian Guardian
THE Acting Director-General of the National Pension Commission (PenCom), Mrs. Chinelo Anohu-Amazu, has said that deliberations at the World Pension summit (African Special) would ultimately proffer solutions to ensure that Africa remains at the cutting-edge in conceiving and implementing sustainable pension policies.
She made the remark at the opening of the summit in Abuja that “in the course of the deliberations, we must be mindful of the fact that our hopes and aspirations as a Continent are primarily hinged on the evolution and development of retirement benefits into a veritable instrument of social change. Not in a theoretical or abstract sense, but in terms of an intrinsic transformation of our institutions, and our operators”.
According to her, “we shall attempt to set out what could be considered a set of challenges that pension professionals and regulators around Africa must surmount, in order to engender the evolution of a retirement pension system that will be rooted in our collective social consciousness. We need systems that are relevant to the fundamental needs of our Continent, and which are dynamic enough to initiate and also respond to developmental challenges facing the Continent in an increasingly interdependent global economy”.
Without a doubt, she said, the existence of pensions as an instrument of social redistribution is at the core of contemporary national economies. Indeed, the shift towards contributory pensions is undeniably the greatest evidence of our collective resolve to invest a portion of current earnings, in order to have a more predictable and prosperous retirement in the long term. Not surprisingly, the success of the contributory pension scheme has triggered an exponential growth in pension funds and size of assets under management across the globe. We are very pleased to state that in Nigeria, the value of pension assets has grown from 1.47 per cent in 2006, to 9.57 per cent in 2013 of our national GDP.
As the proportion of retirement income provided by private pensions becomes continues to grow, she said, the regulatory framework designed to protect those funds becomes ever more crucial. The theme of this Summit – ‘Shaping the Future’ –thus underscores the imperative of institutionalizing a risk-based approach to the supervision and control of pension markets across the Continent. This risk-based approach focuses on the identification of potential risks faced by pension funds and strengthens mechanisms that are in place to attenuate those risks. This ultimately allows the regulatory agencies to channel their resources towards issues that pose the greatest threat to the stability of the industry.
According to her, in the course of the summit delegates will also deliberate on strategies for developing an appropriate framework for leveraging pension funds across the Continent to accelerate the implementation of critical high-impact infrastructure projects. Infrastructure development remains a key driver and a critical enabler of sustainable growth in Africa and the current favorable economic landscape on the Continent provides a unique opportunity for the public and private sectors to collectively address the infrastructure gaps. Focusing on Africa’s infrastructure challenges will indeed help in creating the economic pre-conditions needed for longer-term growth as well as to foster poverty alleviation.
However, disruptive market, demographic, fiscal, and environmental dynamics are fundamentally reshaping Africa’s economic landscape. In this new reality, National Governments must think of infrastructure, not in the general but in the specific, understanding the ways in which different infrastructure sectors—such as transportation, energy, and water—are governed, financed, and sustainably delivered. Governments need to outline their priorities given their peculiar economies, competitive advantages, and infrastructure needs. As public finance become more finite, it is expected that the next generation of African infrastructure will require the public and private sectors to engage and partner in innovative ways.
“Beyond Africa’s infrastructure needs, a critical challenge facing the Continent is managing the radical change in how projects are funded and financed. Despite infrastructure’s fundamental role in promoting national growth and competitiveness, most African Governments have been unable to adequately invest in infrastructure given the decline in traditional sources of government funding and the paucity of funds. Unfortunately, many public finance initiatives remain hamstrung due to the lingering effects of the 2008 global financial crisis. Given the size of Pension fund assets across Africa there is a real opportunity for policymakers to collaborate with pension professionals so as to effectively leverage these assets for sustainable progress. Reaching a consensus on how best to harness the Continent’s pension fund assets as catalysts for economic development and prosperity of its economies would thus be a desired outcome of this Summit”.
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| Ghanaians demonstrate to protect pensions. |
Written by EDITOR
Nigerian Guardian
THE Acting Director-General of the National Pension Commission (PenCom), Mrs. Chinelo Anohu-Amazu, has said that deliberations at the World Pension summit (African Special) would ultimately proffer solutions to ensure that Africa remains at the cutting-edge in conceiving and implementing sustainable pension policies.
She made the remark at the opening of the summit in Abuja that “in the course of the deliberations, we must be mindful of the fact that our hopes and aspirations as a Continent are primarily hinged on the evolution and development of retirement benefits into a veritable instrument of social change. Not in a theoretical or abstract sense, but in terms of an intrinsic transformation of our institutions, and our operators”.
According to her, “we shall attempt to set out what could be considered a set of challenges that pension professionals and regulators around Africa must surmount, in order to engender the evolution of a retirement pension system that will be rooted in our collective social consciousness. We need systems that are relevant to the fundamental needs of our Continent, and which are dynamic enough to initiate and also respond to developmental challenges facing the Continent in an increasingly interdependent global economy”.
Without a doubt, she said, the existence of pensions as an instrument of social redistribution is at the core of contemporary national economies. Indeed, the shift towards contributory pensions is undeniably the greatest evidence of our collective resolve to invest a portion of current earnings, in order to have a more predictable and prosperous retirement in the long term. Not surprisingly, the success of the contributory pension scheme has triggered an exponential growth in pension funds and size of assets under management across the globe. We are very pleased to state that in Nigeria, the value of pension assets has grown from 1.47 per cent in 2006, to 9.57 per cent in 2013 of our national GDP.
As the proportion of retirement income provided by private pensions becomes continues to grow, she said, the regulatory framework designed to protect those funds becomes ever more crucial. The theme of this Summit – ‘Shaping the Future’ –thus underscores the imperative of institutionalizing a risk-based approach to the supervision and control of pension markets across the Continent. This risk-based approach focuses on the identification of potential risks faced by pension funds and strengthens mechanisms that are in place to attenuate those risks. This ultimately allows the regulatory agencies to channel their resources towards issues that pose the greatest threat to the stability of the industry.
According to her, in the course of the summit delegates will also deliberate on strategies for developing an appropriate framework for leveraging pension funds across the Continent to accelerate the implementation of critical high-impact infrastructure projects. Infrastructure development remains a key driver and a critical enabler of sustainable growth in Africa and the current favorable economic landscape on the Continent provides a unique opportunity for the public and private sectors to collectively address the infrastructure gaps. Focusing on Africa’s infrastructure challenges will indeed help in creating the economic pre-conditions needed for longer-term growth as well as to foster poverty alleviation.
However, disruptive market, demographic, fiscal, and environmental dynamics are fundamentally reshaping Africa’s economic landscape. In this new reality, National Governments must think of infrastructure, not in the general but in the specific, understanding the ways in which different infrastructure sectors—such as transportation, energy, and water—are governed, financed, and sustainably delivered. Governments need to outline their priorities given their peculiar economies, competitive advantages, and infrastructure needs. As public finance become more finite, it is expected that the next generation of African infrastructure will require the public and private sectors to engage and partner in innovative ways.
“Beyond Africa’s infrastructure needs, a critical challenge facing the Continent is managing the radical change in how projects are funded and financed. Despite infrastructure’s fundamental role in promoting national growth and competitiveness, most African Governments have been unable to adequately invest in infrastructure given the decline in traditional sources of government funding and the paucity of funds. Unfortunately, many public finance initiatives remain hamstrung due to the lingering effects of the 2008 global financial crisis. Given the size of Pension fund assets across Africa there is a real opportunity for policymakers to collaborate with pension professionals so as to effectively leverage these assets for sustainable progress. Reaching a consensus on how best to harness the Continent’s pension fund assets as catalysts for economic development and prosperity of its economies would thus be a desired outcome of this Summit”.
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