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APSA Conference Report 2020

Executive Summary

The APSA 2020 virtual conference followed the first successful conference held in Nairobi in September 2019. The year 2020 conference was meant to be held in Kigali, Rwanda, but the advent of Covid-19 pandemic occasioned a change of the initial plan.

Themed “Africa’s Pension Industry During and After COVID-19”, the conference discussions revolved around five key topics. Each topic had various speakers with wealth of knowledge and experience on the respective subject matter. The conference had a chief moderator as well as session moderators  who led and guided discussions.

The first session focused on experience sharing by various pension supervisors and some speakers on how they had dealt with the impact of Covid-19 on the Pension Industry in their respective jurisdictions. The discussions brought out the fact that Covid-19 had destabilised economies of the world with Africa not being an exemption. Countries revised their economic growth figures downwards for the year 2020. The pension industry was equally affected through adverse effects on the labour market and industries occasioned by widespread restriction on movements and lockdowns. In response, various pension supervisors issued raft of measures to curb the adverse effects brought about by the pandemic.

The second issues discussed was hinderances to expansion of pension sector development in Africa and possible ways to address them. It came out that the usual challenges to the pension industry in Africa such as low pension penetration level, meagre investment returns and low levels of savings for retirement were exacerbated by the pandemic. As such, the need for a comprehensive and well sequenced national pension policy was identified as the most suitable intervention to address the identified hindrances to pension development in the continent. The policy should have clear objectives with specific focus on the informal sector to expand pension coverage.

Another important area discussed during the conference was futuristic view of the pensions industry with specific focus on how the benefits brought about by development in technology could be harnessed to boost growth in the pension industry. Given lessons learnt during the pandemic, it was evident that pension plans should leverage more on technology in coming up with new products that are simple, flexible and cost effective. In addition, pension models, now and in the future should incorporate consumer protection, financial literacy and communication in times of crisis. Particularly, they should pay attention to fraud and cyber security that come along with increased use of technology.

The fourth area covered was on how pensions schemes navigated through investment of pension assets in the wake of Covid-19 in a prudent and sustainable manner. From the discussions, It emerged that the pandemic had hit pension assets as result of the effects it had on financial markets. Therefore, it was necessary for pension funds to ensure proper diversification and focus on the long term investment in recognition of (Environmental, Social and Governance) ESG factors. Some of the proposed measures going forward included; co-investment, alternative investment vehicles and adopting impact investment principles.

Finally, the conference discussions were concluded with highlights on some key outcomes that required follow up by the interim executive committee of the APSA. Some of the pertinent issues identified were;  setting up and funding of an APSA secretariat, putting in place a legal framework to guide cooperation and coming up with a programme of activities and projects.