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A Template to Jumpstart Digital Micro Pension Inclusion in Africa


In most countries, formal pension arrangements were originally designed for and restricted to salaried employees in the public and private sectors. This inadvertently left out roughly 1.8 billion non-salaried self-employed individuals such as farmers, small shopkeepers, self-employed women, daily wage earners, overseas migrants, street vendors, fishermen, contract labour, gig and platform workers, domestic help, and blue-collar workers in small and micro-enterprises.

This gigantic pension coverage gap, coupled with increasing life expectancy and a breakdown in the traditional joint family support structures due to labour mobility, has brought the world to the brink of an old age poverty crisis. Developing countries with predominantly informal labour markets will face particularly dire consequences, with between half and 95 percent of their workers excluded from formal pension arrangements.

According to The World Bank, developing countries are also getting old before they become rich, and at far lower levels of income than most OECD countries. As per the Bank, the transition from “ageing” to “aged” societies is taking only 20 to 25 years in developing economies, compared with 50 to 100 years for the currently older, rich countries. For example, although Africa is the youngest continent today, UN projections in Table 1 below show that Africa will experience the fastest growth in its elderly population — rising from 69 million in 2017 to a whopping 226 million by 2050.