Pension funds are increasingly seen as the optimal source of financing for the continent’s development needs, with the African Development Bank (AfDB) estimating that more than US$1.3 trillion will be needed annually to meet those needs.
African pension funds are estimated to have US$700 billion in assets under management, and funds could be directed to African projects as traditional overseas sources of funding dry up due to global geopolitical realignment and the pace of growth in infrastructure demand.
First, organizations are preparing to come together to create the Africa Fund at the $700 Billion in One Room Pan-African Pensions Summit to be held in Kampala, Uganda, from November 5th to 7th. The summit, with the theme ‘Pension Funds – Africa’s engine of growth’, will be hosted by the National Social Security Fund (NSSF) Uganda, believed to be East Africa’s largest fund with a value of more than US$7 billion. It will bring together pension fund CEOs and chief investment officers from across Africa, global investors, development finance institutions, venture and private capital firms, policy makers and government officials from across the continent and beyond.
Africa’s future is in our hands and our pensions hold the power. With over USD 700 billion of investable capital, African pension funds are shaping the next wave of growth. Join industry leaders, innovators and policy makers at the Pan-African Pensions Summit in Kampala, Uganda. … pic.twitter.com/od8d0IOerR
— NSSF Uganda (@nssfug) October 20, 2025
Leonard Zulu, the United Nations Resident Coordinator for Uganda, says Africa needs to look inward, mobilizing domestic savings, diaspora remittances and mixed financing models to reduce aid dependence.
“Traditional models of development cooperation are being redefined and official development assistance, while important, is no longer sufficient to address the scale and complexity of the challenges Africa faces today,” Zulu said, adding that “reduced aid flows, shifting geopolitical priorities and “We are seeing greater financial uncertainty than ever before. Strengthening domestic resource mobilization and developing viable solutions for innovative financing are critical to supporting national development strategies while promoting resilience and sustainability,” he added.
Zulu noted that 15 of the continent’s 20 traditional donor partners have cut funding, requiring a rethink of how development is financed. Africa needs to move from aid to trade and ensure small and medium-sized enterprises have access to the capital they need to achieve national goals.
Earlier, in late September, the African Social Security Institute partnered with the African Finance Corporation (AFC) to launch the Africa Savings for Growth program at the United Nations General Assembly in New York. The initiative, which aims to leverage US$1.17 trillion in institutional assets across Africa to meet infrastructure needs across Africa, brings together social security institutions from 15 countries with over US$54 billion in pension assets, Morocco’s Deutsche d’Group (CDG) Group, a state-owned financial institution that manages long-term savings, and the AFC. The initiative aims to build a roadmap for policy reform, expand the data set of Africa’s capital pool, and increase allocation to infrastructure and private sector-led programs on the continent.
The Africa Savings for Growth program, launched under the Global Africa Business Initiative (GABI) as part of the UN Global Compact, builds on the AFC’s 2025 analysis, which identified at least US$1.2 trillion in institutional assets across Africa, and prioritizes concrete deliverables on which international investors and policymakers can act.
Open Capital Pool Database: Maintaining and regularly updating the most comprehensive and market-accessible dataset on African institutional investor savings, including pension funds, insurance, social security institutions, public development banks, and sovereign wealth funds Policy Reform Roadmap: Practical recommendations to enable pension and social security funds to invest in infrastructure while maintaining asset-liability alignment – prudential guidelines, risk-sharing mechanisms, and intermediary instruments – Savings Mobilization Handbook: A country-level strategic allocation diversification model to increase formal participation and reduce shackles: Pathways to shift portfolios away from short-term, low-yield instruments that concentrate exposure to the public sector and exclude private enterprises High-impact projects that can accelerate the socio-economic development of African countries by connecting people and countries, increasing productivity, improving the quality of life of Africans and ensuring the sustainability of pension funds.
AFC’s 2025 findings show that pension and social security portfolios in many markets are underleveraged for development and concentrated in short-duration products that limit returns and private sector financing. The Africa Savings for Growth program will identify replicable lessons from successful national models and chart a realistic path to risk-managed long-term investments.
“African-led investment is the most effective way to quickly achieve the scale of transformation needed while fostering international support for the continent’s infrastructure,” said Samaira Zubair, President and CEO of AFC. “This initiative is about Africans coming together to leverage our capital for Africa’s growth. Together, our pension funds and financial institutions can unlock new opportunities, drive development and demonstrate the power of collective action to build the continent’s future without compromising our fiduciary responsibilities.”
Rachel Moaoshodi, Managing Director and CEO of ARM-Harith Infrastructure Investments, West Africa’s leading infrastructure and climate change fund manager, provides a real-world example of how African pension funds can drive Africa’s development.
“We partnered with FSD Africa (a professional development agency that helps Africa deliver finance for its future) to create a first-of-its-kind early yield liquidity facility, which is a catalyst layer that allows pension funds to receive early and predictable distributions in the early stages of their funds, essentially ‘de-risking the J-curve’,” said Moaoshodi. “This innovation has increased the number of local pension participants by almost five times compared to our first fund.”
“Traditionally, Nigerian pension funds have been reluctant to invest directly in infrastructure equities due to their liquidity profile and the lagging and regressive nature of returns that do not meet regulatory standards. So, with our second fund, we have deliberately reversed the scenario.
More Oshodi says the strategy sets a precedent. “We show that designing fit-for-purpose instruments that address real institutional barriers can unlock regional capital at scale. This is not just theory, but a practical model that can be replicated across markets to accelerate financing of the kind of sustainable and job-creating infrastructure that Africa urgently needs, from clean power plants to transport corridors and logistics hubs.”
“This is a clear example of how blended finance, when done right, can be a powerful enabler of local ownership and capital recycling. We believe this is the way to build Africa’s infrastructure ecosystem, which is donor-agnostic, homegrown and globally investable.”
According to ARM-Harith, the narrative about resource-poor Africa is outdated. The continent has capital, but lacks the tools, rules and coordination to deploy its wealth into long-term development. With the right reforms and structures, Africa can create new financing models, one where local capital leads and global capital follows.
Photo above: Building Africa (© Lcswart | Dreamstime.com)
