By Zareena Camroodien – Departmental Head: Fund Governance and Trustee Conduct (FSCA)
The Financial Sector Conduct Authority (FSCA) is an executive member of the Africa Pension Supervisors Association (APSA). We are honoured to have been elected as chair of APSA at the Annual General Meeting held on 26 November 2023 in Kampala, Uganda.
About APSA
APSA is an organisation which brings together pension regulators and supervisors from across the African continent to discuss issues of common interest. The goal of this association is to provide a platform for collaboration, cooperation and the exchange of ideas to better supervise, regulate and grow the pension funds sector on the continent.
Pensions as we all know play an important role in ensuring that workers retire with adequate retirement cover, dignity and mitigates against poverty.
The idea of forming an association was mooted by African pension regulators/supervisors who are members of the International Organisation of Pension Supervisors (IOPS) during a side meeting at an IOPS forum in Berlin, Germany, in 2016.
African pension fund regulators/supervisors noted the limited time available at IOPS meetings for discussing issues pertaining to African member countries. Moreover, challenges on the continent are largely not experienced in other jurisdictions. This scenario ignited the idea that the continent needed a forum to discuss issues relevant to the continent and learn from their different experiences and perspectives with an aim to address the particular challenges faced on the African continent.
The founding members of APSA comprised six countries namely, Kenya, Nigeria, Rwanda, South Africa, Uganda, and Zambia. Other countries that have joined APSA are Botswana, Egypt, Mauritius, Ghana, Morocco, Malawi, Burundi, Tanzania, Namibia and Sierra Leone. APSA seeks to expand its membership to foster collaboration among member countries to enable its citizens and residents to retire comfortably and with dignity.
The collaboration also provides the impetus needed to unlock the potential of the pension funds sector on the continent. Through the association, countries would be better placed to tackle common problems and find solutions to challenges unique to Africa. Some of the notable challenges include lower investment returns, Africa’s labour structure which comprises a significant portion of the labour force forming part of the informal sector with no or limited access to retirement funds or retirement products, which may service their needs during retirement.
The association is poised to accelerate the pace of reform in the pension space for greater economic impact in Africa. This includes harnessing the opportunities available through fintech. One of the many notable opportunities in the pensions context in Africa is that it has the largest young population in the world, solutions (policies and systems) must accordingly speak to this demographic.
APSA holds a conference annually bringing together pension supervisory bodies, professionals, and pension fund sector practitioners from across the continent and beyond.
APSA is also expected to run initiatives on pension coverage expansion in some member countries during the course of this year. The association will further facilitate and co-ordinate regional research, knowledge management and capacity building initiatives. Other programmes include:
- Policy and Regulatory Support: through undertaking policy dialogues, peer-to-peer learning, and development and issuance of principles and guidelines for better supervision and regulation of the pension funds sector.
- Research and Advocacy: through targeted research on topical areas relevant to the pension funds industry and advocacy on pension inclusion and increased uptake of alternative investment instruments (in certain jurisdictions).
- Capacity Building: through targeted capacity building conferences, workshops, and forums for relevant pension industry stakeholders for purposes of sharing knowledge and best practices.
- Knowledge Management and Information Sharing: through annual conferences, development of a centralised data repository and dissemination of research, publications, and other materials.
The Conference
South Africa attended APSA’s fourth annual conference themed “Sustainable Pension Inclusion in Africa” held in Kampala, Uganda, on 27 and 28 November 2023 hosted by the Uganda Retirement Benefits Regulatory Authority (URBRA).
The conference brought together pension supervisory bodies from across the African continent to discuss pension inclusion as well as the challenges and experiences in the supervision and regulation of the pension funds industry in Africa, with insights from the continent and beyond.
The conference had renowned speakers, professionals, and pension sector practitioners who shared global knowledge and expertise on pension issues.
The conference addressed the need for sustainable pension inclusion as Africa is projected to have an estimated 226 million pensioners by 2050. There was therefore an urgent need for governments, regulators and the private sector to collaborate and develop solutions to mitigate the risk of poverty in old age over the next two to three decades.
Africa has a population of 600 million people, the majority of whom are young people, without any or limited retirement savings. This is both a challenge and an opportunity for sustainable pension inclusion solutions.
It further recognised the importance of retirement funds in serving the wider economy and not only pensioners. The majority of retirement benefits and pension systems in Africa are designed for formal-sector workers and exclude the informal sector which forms a significant proportion of workers in Africa. There is a need for the non-salaried and self-employed (including the youth) to be brought into the pension system.
If pensions are to be sustainable and inclusive, it means that no person should be excluded. This requires reforming the pension sector to cater for the working population in totality. Various speakers mooted the idea that micro-pension systems have worked in certain jurisdictions. Best practices, lessons learnt and recommendations for sustainable pension inclusion for the continent were canvassed.
Leveraging digital technology infrastructure: Speakers opined that technology was key in driving inclusion, as digital platforms could enable fund managers to reach millions of people within a short period of time. This enables people to register and open pension accounts, and to get regular updates on their savings. Africa’s high mobile phone penetration rates could be the catalyst for an inclusive sustainable pension sector for the continent.
Adaptation of micro-pension systems: Africa is not homogenous as evidenced by the continent’s 54 countries that are at different levels of development and have various pension systems, populations, and governance levels, among many other differences. This means that there is not a one-size-fits-all template that can be used for the entire continent. However, there are micro-pension systems that may be adopted across the continent so that every country does not have to start from scratch.
In this regard, the book Templatising Micro-Pensions for Africa was authored as a collaborative effort by 25 policymakers including, regulators, aid agencies, pension sector experts, and digital financial ecosystem stakeholders. It covers policy outlook and country experiences on expanding pension coverage to the informal sector; demand-side considerations of designing targeted micro-pension solutions and leveraging the digital financial services infrastructure for micro-pensions. South Africa also contributed to this book – the FSCA’s own Mr Olano Makhubela and National Treasury’s Ms Alvinah Thela authored a chapter in this publication.
The conference also delved into the inter-linkages between pension funds and environmental, social and governance (ESG) principles and practices and how it has become increasingly crucial for the pension funds sector in Africa to include these.
Innovative Climate Finance was also discussed in the context of the importance of environmental considerations in sustainable pension inclusion, the new developments in ESG reporting, investment options for fund managers beyond government securities with climate/environmental action forming a critical part of creating a safety net for the future.
The Conference was brilliant in respect of content, providing practical solutions, organisation and venue, thanks to the Uganda Retirement Benefits Regulatory Authority (URBRA).
The upcoming APSA Conference will be held at the Radisson Blu Mosi-Oa-Tunya Hotel, Livingstone, Zambia on 24 to 26 July 2024. | 
