Follow us

Opening remarks by Nzomo Mutuku, interim chairman, Africa pension supervisors’ forum (ASPF) and CEO, retirement benefits authority (RBA), Kenya during the second Africa pension Supervisors Conference held on September 10-11, 2020 via video conference.

The Interim Vice Chair, Africa Pension Supervisors Forum, Mr. Umar Farouk Aminu

Interim Executive Committee Members, Africa Pension Supervisors Forum

Secretariat Coordinator, International Organization of Pension Supervisors, Mr. Dariusz Stanko

Head, OECD, Private Pension Unit, Mr. Pablo Antolin

The Director, Financial Sector Deepening Africa, Mr. Mark Napier

The Lead Financial Sector Specialist, the World Bank, Ms. Fiona Stewart

The Strategy Expert, Financial Sector Development, African Development Bank, Mr. David Ashaigbor,

Representatives of the International Finance Cooperation

Pension Supervisors from across the African Continent

Distinguished Moderators, Panelists and Speakers

Ladies and Gentlemen

May I take this opportunity to welcome you to this year’s African Pension Supervisors Forum which is quite unique in its own way.

As you may recall from the previous conference held in Nairobi, Kenya in September of 2019, this year’s conference was slated for Kigali, Rwanda. However, due to what we were not able to foresee, the advent of the COVID-19 global pandemic, this could not be possible hence this virtual conference.

Indeed, a lot has happened since we first met in Nairobi for the inaugural meeting where Kenya was appointed interim chair of the newly created Africa Pension Supervisors Forum. Nigeria was appointed to deputise Kenya with South Africa, Rwanda and Zambia elected interim executive members.

Allow me to remind us that the interim office was scheduled to run for two years from January 2020 to December 2021- when the interim committee shall hand over to a new committee that we shall elect.

The committee’s mandate was to come up with a legal framework to anchor the Forum including setting up of a permanent secretariat as well as foster collaboration between the Forum and other international organisations including the International Organisation of Pension Supervisors (IOPS).

I am pleased to report that the Interim Executive Committee has been able to make progress in these areas notwithstanding the challenges brought about by the pandemic. We continue to consult on the legal framework and to study the experience of other groupings of financial sector supervisors on the continent and expect soon to have a proposal on the framework for the APSA.

Regarding cooperation with other organisations, we are working well with the IOPS who have allowed the APSA to have a voice during IOPS events and to update the IOPS membership on our activities. We look forward to organising joint IOPS/APSA training sessions in the near future. We also continue to urge African pension supervisors to join the IOPS.

We have also been able to cooperate with the African Development Bank (AFDB) and have had a series of events with African pension supervisors on the issue of developing Institutional Investor appetite for new asset classes.  I must also acknowledge AFDB for allowing us to leverage on their video conferencing platform for our meetings and for promoting APSA news in their publications.

With the World Bank we are working on a potential project on sustainable finance and in particular regulation of Economic, Social and Governance (ESG) factors leveraging on work that the bank has done in Colombia and Thailand as well as on the potential of using SPV vehicles to allow pension schemes invest in alternative investments.

We are also looking at furthering our cooperation with Financial Sector Deepening Africa (FSDA) who, as you will recall, sponsored our first annual conference in Nairobi and who have recently mainstreamed supporting pension sector development into their strategy to supplement their capital markets programs.

Ladies and gentlemen, allow me to now turn to this year’s virtual conference which is themed around the effects of COVID-19 on the pensions industry across the African continent and the future outlook post the pandemic.

At this point, it is important to highlight that the outbreak and continued persistence of the Covid-19 global health pandemic has destabilized the global economic order by causing severe economic disruptions and slowdown in economic activities. In the international scene, severe disruptions across all activities has been witnessed. Equally, countries have imposed restrictions on movement of people thus resulting in sharp increase in unemployment levels, constrained supply chains. reduced production and global financial market. volatility

In Kenya, for instance, we have witnessed similar interruptions resulting in a revision of GDP growth rate from 5.4% in 2019 to 2.3% in 2020. The general investment environment has been affected with investors losing value in the capital and other markets.

For the Pensions Sector, there have been a number of disruptions with direct and indirect impacts to members and sponsors of pension schemes. Specifically, there has been a general decline in pension contributions due job losses & unpaid leaves, applications for suspension of contributions by sponsors/employers and investment losses especially in securities, property rentals and offshore investments. Pressures to allow access to pension benefits before retirement age have also intensified.

Ladies and gentlemen, I presume the issues highlighted reverberates across jurisdictions represented in this forum. All of us gathered here have had to deal with these issues. Discussions on these issues constitute a greater part of our agenda for the next two days.

We will therefore begin by listening to experiences of various pension supervisors globally and across Africa on how they have dealt with the impact of COVID-19 in the pension industry in their own jurisdictions.

Equally as a continent, we cannot ignore the perennial challenges that continue to affect our industry such as low pension penetration level, volatile investment returns and low pension adequacy, particularly during this time of crisis, when some of these challenges have been exacerbated.

With Covid-19 causing market volatility and uncertainty for businesses and personal finances, a great concern for supervisors is that pension members could be at risk of making knee-jerk decisions that would deplete pension funds. Members who lost jobs and those that were compelled to concede pay cuts are most likely to consider dipping their hands into their pension funds ‘to survive’ the difficult times.  Indeed, it is these unprecedented times that Pension Supervisors can help prevent members taking actions they may later regret by “urging them not to rush decisions and providing them with clear, relevant and timely information so they can make informed decisions”.

Equally, pensions supervisors should encourage diversity of pension funds investment in alternative assets not directly impacted by market volatility in financial and property markets to guarantee stability and sustained returns.

Ladies and gentlemen, looking into the future, pension plans are poised to leverage more on technology than they have in the past given lessons learnt during the pandemic. It would be important to propose new models going forward to the pensions sector.  Such models should also incorporate issues of consumer protection, financial literacy and communication in times of crisis.

Ladies and gentlemen, I am certain that with the above outlined agenda and the high calibre of the diversity of speakers and participants from varied backgrounds, our conference will be well encompassing and enriching. I therefore look forward to sharing of ideas on practical regulatory and supervisory responses aimed at helping our jurisdictions recover from the crisis and inform future supervision, regulation and development of our industry.

As I conclude let me express gratitude to my fellow members of the interim executive committee from Nigeria, Rwanda, South Africa and Zambia for their dedication and efforts to enable us deliver the new born APSA.

I would also like to acknowledge my organising team from the Retirement Benefits Authority led by Christine Onyango who has stepped in as the APSA secretariat in order to organise this event as we put in place a permanent secretariat.

Thanks also to all the moderators, speakers and panellists for agreeing to share their great experience during this conference

Finally, thank you all the participants for taking time to join us over the next two days.

I wish us fruitful deliberations and a successful event.

Thank you.