Nigeria’s pension, four others collaborate to grow over $70bn assets

Nigeria’s pension sector with assets under management (AUM) in excess of N16.7 trillion, equal to $22.14 billion as at June 2023 is collaborating with four other countries in Africa to grow their over $70 billion market size.

The collaboration will enable them to foster the adoption of alternative investments and will focus on green finance, a pivotal driver for bolstering various sectors of the economy.

This collaboration on Monday witnessed the launch of the Pan-African Fund Managers’ Association (PAFMA), a new trade association bringing together fund managers from across the continent with backing from some of the industry’s most powerful players.

The five founding members of PAFMA are the Pension Fund Operators Association of Nigeria (PENOP); the Fund Managers Association (FMA) in Kenya; the Botswana Investment Professionals Society (BIPS); the Ghana Securities Industry Association (GSIA) and the Investment Management Association of Uganda (IMAU).

These national associations, which between them account for assets under management (AUM) of over $70 billion, have established PAFMA in collaboration with FSD Africa, a specialist development agency working to build and strengthen financial markets across Sub-Saharan Africa

The launch of PAFMA, at an event in Nairobi Monday during the Africa Climate Summit 2023 where the founding members signed an MoU comes as the industry faces many challenges.

These include historically low savings rates, which as of 2021 stood at just 24 percent of GDP in Sub-Saharan Africa – along with a scarcity of viable investment opportunities and the escalating environmental risks confronting the continent.

Recognising the prevalent dominance of government securities among the current investible assets managed by fund managers on the continent, PAFMA’s primary objective is to foster the adoption of alternative investments. This includes a particular focus on green finance, a pivotal driver for bolstering various sectors of the economy.

By championing these alternative investment avenues, PAFMA seeks to not only stimulate job creation but also enhance income generation.

UNI Agric Markurdi
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