Africa running out of time to sort looming pensions crisis

An expert at the ongoing 4th Annual Conference of the African Pension Supervisors Association (APSA) in Kampala has said urgent steps need to be taken to reverse a trend in which the continent has only 10% pension coverage of its population.

Sundeep Raichura, Group Chief Executive Officer Zamara says that before African experts can talk of extending pension coverage, they must first admit it has no working pension system, in order for the leaders to focus on getting home grown solutions.

“In Africa, talking about extending coverage, is actually missing the point. We should be saying we do not have a pensions system, with the exception of 10% of our population. Then we can see the weight of the challenge, and come out with homegrown solutions, that we need to address the challenge of pension inclusion on our continent,” Raichura said on day one of the APSA conference on Monday.

Raichura argued that Africa is a demographic ticking time bomb. “We have 600 million workers in Africa who do not have anything to fall back upon in their old age. In the next 20-25 years, there will be about 225 million people above the age of 60. We cannot wish this problem away. We need to think about it,” he said.

Pension sector supervisors and regulators from all over Africa at Serena Hotel Kampala, to discuss ways of extending pension coverage to more citizens around the continent.

Pensions inclusion

“The whole subject of pensions inclusion is not just an imperative, not just critical, but it is also extremely urgent for our continent. In terms of impact, if we get this right, we all stand to benefit. But if we don’t, I do not even want to imagine the consequences of not getting this right,” Raichura added

“We say this the youngest continent; the median age is about 19 years, so we say we have a demographic dividend, which is great, and hopefully we will benefit if we get things right.”

Sundeep Raichura from Zamara said he feels in many ways experts are not even correctly framing the challenge Africa faces in order to give it the weight and the urgency it needs. Zamara is a Pan African financial and insurance solutions provider which is headquartered in Kenya and whose footprint extends to other African countries including Nigeria, Uganda, Rwanda, Tanzania and Malawi.

He said talking about extending pension is a good discussion in the more developed world because they already have a system, unlike Africa.

Source: Independent