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Pension Funds Reaping Rewards in Africa

Africa’s Investment in Pension Funds Could Triple Over 10 Years

Renaissance Capital estimates that Africa’s already growing pension sector will growth from $260bn in 2010 to $622bn in 2020, and then on to $7.3trl by 2050! Reasons for this boom in growth are not only due to the much touted increase in the Africa middle class, but a growing urbanisation and formalisation of the labour force. Business Day Live also floats a few more statistics that highlight the wealth of opportunities in Africa…

From 2003 to 2011, intra-African investment into new foreign direct investment (FDI) projects in Africa grew at a 23% annual compound rate, according to Ernst & Young. Since 2007, that rate has increased to 32.5%, more than double the growth in investment from non-African emerging markets and almost four times faster than FDI from developed markets.

Cross-border African investment is set to accelerate as local firms seek new markets, resource-rich countries launch sovereign wealth funds and assets held by pension funds grow. Underpinning this are the favourable demographics of sub-Saharan Africa, the world’s youngest region, which will be the only region not to experience a decline in its saving rate by 2030, according to the World Bank.

By the middle of the century, Africa’s working age population will number 1.2-billion, from 500-million today, meaning it will provide one in four of the world’s workers, compared to one in eight from China.

African countries are waking up to the potential to investing in their neighbours so the competition for European countries wanting to invest is increasing… Come to a Business in Africa Pays conference and learn how to get to the front of the queue.

To read the full article, click here