Pension Funds Poised to Drive Africa’s Self-Financed Development

Pension funds across Africa are taking centre stage in a new push to end the continent’s long-standing dependence on foreign aid and external loans.

The plan is to channel the continent’s vast pension savings into financing its own development, from infrastructure and industry to job creation and innovation.

This vision will take centre stage at the first-ever All Africa Pension Summit, scheduled for November 5-7, 2025, in Kampala, where pension managers, investors, and policymakers will explore how to channel Africa’s domestic resources into infrastructure, industry, and job creation.

According to Patrick Ayota, Managing Director of Uganda’s National Social Security Fund (NSSF), the summit aims to inspire a continental shift toward self-reliance. “It’s time Africa takes responsibility for funding its own development,” Ayota said. “Global aid is shrinking, and we can no longer rely on others to pay for our ambitions. We must pool our savings and invest in our own future.”

Ayota revealed that African pension funds collectively hold between USD 700 billion and USD 1 trillion, much of it locked in low-risk assets such as government securities. He noted that if each pension fund committed just one per cent of its portfolio to a shared investment pool, the continent could mobilise USD 7-10 billion, enough to build five expressways.

Leonard Zulu, the United Nations Resident Coordinator in Uganda, echoed the call for Africa to take charge of its own growth. “Africa is not poor. We have over USD 1.3 trillion in pension funds, nearly USD 500 billion in domestic revenue, and USD 427 billion in private savings,” Zulu said.

He commended NSSF Uganda for aligning its initiatives with the UN Sustainable Development Goals and Africa’s Agenda 2063, both of which emphasise self-reliance and inclusive growth. However, he cautioned that donor funding is steadily declining. “Fifteen of Africa’s twenty key development partners have reduced their aid budgets. We must move from aid to trade, and from dependence to resilience.”

Uganda’s Fourth National Development Plan (2025-2030) aims to expand the economy from USD 61 billion to USD 500 billion by 2040. Zulu noted that achieving this target will require mobilising domestic resources, not only through taxes, but also via pension funds, diaspora remittances, and innovative financial tools such as green and infrastructure bonds.

“Uganda’s pension sector alone is worth 25.4 trillion Shillings, up 19 per cent from last year,” Zulu said. “That’s capital waiting to be unlocked for inclusive growth.” Meshack Bandawe, Secretary General of the Africa Social Security Association (ASSA), noted that the continent faces an annual infrastructure funding gap of USD 170 billion, a shortfall that cannot be bridged by governments and donors alone. “We must use our own savings to close this gap,” Bandawe urged.

ASSA, which brings together pension and social security institutions from 15 African countries, is spearheading the creation of an African Infrastructure Investment Fund. 

The fund will pool pension resources to finance projects in energy, transport, water, and agriculture. “We aim to invest in high-impact areas that improve people’s lives,” he said, praising NSSF Uganda’s leadership in promoting regional collaboration and helping other funds overcome regulatory barriers.

Drawing lessons from Asia, Bandawe noted: “Countries like South Korea and Singapore became global success stories by investing their domestic savings in industrial growth. Africa can do the same; we already have the financial muscle; it’s time to use it.”

Amanda Kabagambe, the Chairperson of the East Africa Venture Capital and Private Equity Association (EAVCA), said private investors are eager to partner with pension funds to channel local capital into productive ventures. “We’ve been advocating for policies that encourage local investment, including tax incentives for homegrown private equity and venture capital funds,” she said.

Kabagambe noted that aligning pension capital with private sector innovation could unlock new opportunities for entrepreneurship, infrastructure, and sustainable development.