Africa is becoming its own key investor, says Standard Bank

Invest in AfricaDomestic institutions such as pension funds are playing a bigger role in Africa’s capital markets alongside foreign inflows.

According to figures from Standard Bank, African pension fund capital is $330 billion while insurance investment capital will reach $270 billion by 2018.

Although South Africa still accounts for the majority of institutional investment on the continent, Nigeria, Kenya, Botswana and Ghana have developed sizeable pensions industries, says Hari Chaitanya, head of investor services product management, transactional products and services.

“Pension fund reforms are a hot topic in Africa and will see increased participation from the formal and informal employment sector,” he says. However, he adds that there is still great opportunity for growth since the vast majority of African citizens don’t contribute to pension schemes.

The market capitalisation of the 24 stock markets in Sub-Saharan Africa is growing at nearly 19% a year, says Standard Bank.

In the last five to seven years, growth in the region’s capital markets was largely the result of foreign inflows, such as portfolio investment flows or private equity deals.

©2015 funds global mena

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