31 July 2021
NEWS & OPINION
BECOMING A FINANCIAL PLANNER
Pressure on pensions: How to successfully fund Africa over time BY GERALD GONDO Business Development Executive (Africa), RisCura
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ith an estimated 85% of Africa’s population informally employed, the traditional pension fund model faces a growing challenge. Innovative long-term savings products for this ever-increasing cohort of informal but economically active citizens are urgently required. Products like micro-pensions or other affordable solutions must be brought to market, and soon. It is estimated that Africa had 13 million people aged 65 and over in 1975. Nearly 50 years later, this figure has increased and is expected to reach 150 million people by 2050. Africa’s young population benefits from improved medicines and healthcare, which enormously increases the likelihood of Africans living for much longer. With increased longevity, the necessity for improving the outlook for long-term savings in Africa is critical.
“Products like micro-pensions or other affordable solutions must be brought to market” Nigeria nudges closer, sets an excellent example for the continent According to the latest Bright Africa pensions research from global investment firm RisCura, just over 10% of the Nigerian workforce is formally employed, precipitating the National Pension Commission (PenComm) launching the micro-pension scheme in 2019. The micro-pension scheme seeks explicitly to cater to the informal sector and companies with less than three employees. Innovation of this nature can be adopted by other African countries that face similar demographics and economic constraints.
Fintech for the future Harnessing fintech could foster financial inclusion while boosting African savings. Rwanda provides anecdotal evidence of latent savings potential through combining mobile telephony and fintech. Active mobile penetration in Rwanda now averages 75% of the population. By embedding fintechenabled savings within active mobile telephony, micro-savings products can be accessible to the average mobile user. A collective change By design, pension funds are long-term institutional investors. In Africa, this institutional investor base now holds approximately $350bn in long-term savings. The COVID-19 pandemic brought to light the need for capital to respond quickly to the urgent funding needs of African economies. A proportion of this savings base can meaningfully support and help reduce Africa’s infrastructure deficit. Regulators have been alert to this and are progressively changing regulations to allow for meaningful pension fund participation in innovation and the real economy. Concepts such as regulatory sandboxes are being adopted to ignite and curate innovative financial products and services that may not meet all current regulatory requirements. Pensions can be part of the solution development of Africa’s problems. Through aligned and proactive regulatory reform and leveraging digital and mobile technology, Africa’s institutional investors can direct their savings towards the sustainable development of African economies.
School of Financial Planning Law marks its 20th anniversary BY DR LIEZEL ALSEMGEEST Director, School of Financial Planning Law, University of the Free State
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he School of Financial Planning Law (SFPL) in the Faculty of Law at the University of the Free State was established in 2001 and was the first academic institution in South Africa to offer formal financial planning education and is currently also the largest. The SFPL is especially well known for the Post-graduate Diploma in Financial Planning, which is a cornerstone qualification in becoming a Certified Financial Planner (CFP®). During the past 20 years, the SFPL has gone from strength to strength and added many accredited programmes to its repertoire, specifically focused on providing holistic financial planning education for financial planners to theoretically and practically meet the unique needs of individual clients. We truly believe that individuals need the best financial advice to become financially free, and therefore ensure that our students receive the best education possible. We are continually updating and expanding our programmes and are committed to continuing to be the leader in the financial planning industry. We are proud of what the SFPL has achieved in the past 20 years and are excitedly looking towards the future – even in these uncertain times – to flourish in an industry that has so much to offer and can change people’s lives, not only those of our students but especially the lives of their clients. On the ill-fated day of John F. Kennedy’s death, he was due to deliver the following words: “Leadership and learning are indispensable to each other.” Keep learning and educating yourself and be a leader in the financial planning industry. We stand behind you.
“We are continually updating and expanding our programmes”
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