Nigeria’s pension sector with assets under management (AUM) in excess of N16.7 trillion, equal to $22.14 billion at of 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.
Among its activities, PAFMA aims to spearhead localised research efforts and initiatives to enhance knowledge sharing and capacity building enabling fund managers to evaluate and make investments in regions and countries where they did not previously have a presence.
Serving as a proactive advocate, PAFMA will also offer policy insights and champion the interests of its members in both regional and international arenas as well as facilitating regular gatherings of fund managers from across Africa.
Commenting on the launch, Oguche Agudah, CEO, PENOP Nigeria, said, “I’ve always believed that the solutions to Africa’s challenges lie within us. We need to come together, commit to collaborate, and speak with one voice. The managers of capital on the continent have a unique opportunity to individually and collectively determine to a large extent the trajectory of the continent. Working together, we can achieve so much more. The time is now.”
Patrick Kariuki, chairman, FMA and managing director, Gen Africa Managers Ltd, said, “The Fund Managers Association is very excited to partner with other like-minded Pan-African Fund Manager Associations. Our industry and its future growth depend on vibrant collaboration amongst fund managers across Africa. With PAFMA, fund managers will be able to evaluate and make investments in regions and countries where we did not have sufficient local context. The Fund Managers Association is honoured to be invited to this exciting and very important initiative.”
Mark Napier, CEO, FSD Africa, said: “We are excited about the establishment of the Pan-African Fund Managers’ Association which comes at a timely juncture. This association will be integral for African Fund Management organisations to ensure that they share industry knowledge, manage risks with a continental and international view and drive needed investment in critical sectors such as climate mitigation and adaptation.”
“This African-led initiative is a powerful demonstration of our shared vision to transform Africa’s financial and investments sector landscape.”