African pension funds rally to pool homegrown financial resources
Pension funds across Africa are advocating for the pooling of resources to meet the continent’s development needs, and reducing reliance on traditional foreign funding.
It is estimated that African pension fund assets currently range between $700 billion and $1.25 trillion. While the actual rate of savings remains relatively low, this pool of local capital presents a unique opportunity to drive the continent’s self-sustaining development agenda.
Although several African countries have long depended on external funding from development partners, shifting global geopolitical dynamics have made these sources increasingly unreliable.
As a result, Africa must take greater responsibility for financing its own programs. Speaking at the launch of the All Africa Pensions Summit, set to take place from 5th–7th November at the Munyonyo Convention Centre in Kampala, Patrick Ayota, the managing director of Uganda’s National Social Security Fund (NSSF), emphasized the need to expand pension coverage and deepen the pension capital pool.
“It’s a lie that the informal sector doesn’t save. They do but in cows, land and goats. Can we help them save in money, so that we can monetize that saving?” he said.
Ayota drew comparisons with the ‘Asian Tigers’ countries such as South Korea, Singapore, Malaysia, Taiwan, China and Vietnam whose domestic long-term savings reached 25 per cent of GDP, fuelling their rapid development. By contrast, most African countries continue to struggle with low savings rates.
“Pension funds can become the local investors that act as catalysts for local economies. We want to ensure we can catalyze infrastructure funding just like Tanzania, or Ethiopia with their Grand Renaissance Dam,” he said.
Amanda Kabagambe, the chairperson of the East Africa Venture Capital Association (EAVCA) Uganda, said that partnering with NSSF Uganda to support the summit is a strategic move towards unlocking long-term local capital for transformative investments.
“Africa is home to vast pools of domestic capital in gold, land, in bank accounts, and especially in pension funds. Yet this capital remains underutilized in driving inclusive growth and the infrastructure development our economies urgently need,” Kabagambe said.
She stressed that the All Africa Pension Summit is not just another conference, but a platform for action, aiming to bring together regulators, asset managers, development finance institutions, and institutional investors to rethink the role of pensions in Africa’s future.
“Local capital must lead local development. We should not be sending our start-ups to Europe to teach mobile money solutions to people who have never used it,” she added.
EAVCA, she said, is committed to supporting the ecosystem through data, advocacy, and convening power, highlighting innovative pension and investment models from across the continent.
Meshack Bandawe, the secretary general of the Africa Social Security Association, revealed that pension funds across Africa are working on establishing a continental infrastructure investment fund.
“Our aim is to mobilize resources, share risks and expertise by investing in high-impact infrastructure projects including roads, railways, ports, airports, energy, water and sanitation, telecommunications, and social sectors like health, education, and agriculture,” he said.
According to the African Development Bank, the continent faces an infrastructure funding deficit of around $170 billion annually. Despite ongoing efforts by African governments and international actors, the demand far exceeds available resources, necessitating innovative financing solutions.
“We understand the poverty levels in Africa are estimated at 33 per cent or about $3.4 trillion in economic terms. By leveraging even just $700 billion of pension funds, we could begin to unlock this poverty trap,” he added.
Bandawe pointed out that social security funds across Africa hold massive assets that could be channelled into alternative investments to meet their long-term obligations, while also transforming the continent’s economic and social landscape.
“Modern infrastructure connects people, countries, and markets. It improves business, quality of life, and regional integration. We should not leave it to governments alone. Through pension funds, we have the muscle to drive this transformation.”
Leonard Zulu, the head of the United Nations Country Team in Uganda, noted that the current turbulence in global development financing is marked by declining aid flows, geopolitical shifts, and funding uncertainty requires urgent action.
“Africa must now look inward: mobilizing domestic savings, diaspora remittances, and blended finance models to reduce aid dependency,” Zulu said.
He emphasized that the shift from aid to trade-based development is essential, and that SMEs must gain access to capital markets and banks to achieve national development goals. Zulu also called for the unlocking of domestic capital through innovative instruments such as insurance funds, pension schemes, venture capital, as well as green and infrastructure bonds, remittances, and diaspora investment.
“Uganda’s retirement benefits sector, for example, has grown from Shs 21.4 trillion in 2023 to Shs 25.4 trillion in 2025, a testament to the potential of pension funds to drive sustainable development,” he said.
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