Resolutions from the 2024 APSA Conference

By Allan Senyonga

This year as the Uganda Retirement Regulatory Authority (URBRA) celebrates its 10-year anniversary, a lot has been happening at the Authority. During the just concluded Africa Pension Supervisors Association (APSA) Conference, it was apparent that since 2011, Uganda has registered a very commendable pension investment growth which is now at about Shs21.5 trillion compared to Shs3 trillion a decade ago. However, even in the midst of the celebrations, there were reminders of the journey ahead. In fact, despite this growth, about 90% of the contributors have less than Shs10 million retirement savings.

The general consensus at the conference was that a lot has been done but even more needs to be done not just in the case of Uganda but across Africa as a continent.

As URBRA hosted the the 4th Annual Africa Pension Supervisors’ Association (APSA) Conference at the Serena Kampala Hotel on 27th and 28th November, tough questions were asked about the future of Pension and the importance of inclusivity. The conference held under the theme “Sustainable Pension Inclusion in Africa” recognized that over 85 percent of Africa’s rather young workforce is employed in the informal sector, works largely without contracts, and is excluded from social security, health insurance and retirement benefits.

With plenty of great strides made in countries like Rwanda, Kenya, Nigeria, Ghana, Uganda, and Benin, it is important to note of the huge accrual rate for public sector pension schemes in Africa of 2.2%. This is almost twice the global average of 1.2% and it compounds the fiscal burden as a percentage of Gross Domestic Product (GDP). As a result, arising from the insightful presentations that were had during the conference, several multi-faceted discussions and plenty of thought-provoking contributions and questions throughout the conference, there were some key recommendations that were advanced for for consideration by pension policy makers, regulators, and industry players across Africa. And they included the following;

● There is urgent need to incorporate Environmental, Social and Governance (ESG) considerations into pensions investments.

● Establish independent verification modalities for ESG reporting to ensure benchmarkable standards applicable across various jurisdictions.

● Put in place appropriate measures for ESG risk reporting and development of appropriate guidelines.

● Consider the following imperatives for Africa’s pension inclusion including:

● Review existing legal frameworks to make them inclusive of the informal sector workers.

● Adopt a digital identification system to allow for KYC.

● Encourage bundling of financial products that incorporate both short term and long terms needs for citizens.

● Leverage the increasing financial inclusion occasioned by the expansive mobile telephony penetration in Africa to bolster pension coverage in the informal labour market.

● Enhance financial literacy through targeted awareness programs to ensure increased enrolment into pension saving.

● Champion governments to address foundational issues, such as, affordable

housing, healthcare, and education, that erode disposable income and

hamper pension savings.

● Put in place measures to collect real time data to enable behavioural analytics and build trust among those participating in savings for retirement.

● Establish a coordination office to assist with pushing through the agenda for micro pensions.

● Advocate government support through fiscal initiatives like tax exemptions

and matching contributions to mobilize savings for retirement.

● Encourage simple, easy, and flexible products that allow easy entry into and exit from saving for retirement arrangement by leveraging on Technology.

● Adopt an innovative model that encourages working together with communities to create value into their livelihoods by identifying and addressing their challenges, earning their trust and uplifting them out of poverty.

● Consider policy reforms on the pay-as-you-go defined benefits public sector schemes to address fiscal sustainability, affordability, adequacy of benefits, prudent management and investment, and good governance. This will ease the fiscal burden on government caused by burgeoning pension liability.

These recommendations were resultantly signed off by Mr. Martin Nsubuga the Secretary, Africa Pensions Supervisors’ Association (APSA) & Chief Executive Officer, Uganda Retirement Benefits Regulator Authority (URBRA) on behalf of the various delegates from across Africa.