Regulatory initiatives to help African pension funds to diversify their asset allocation across the continent were welcomed by panelists at the Pensions & Investments WorldPensionSummit Africa Special conference.
A move by the Ghanaian government to require its country's pension funds to decrease their allocations to fixed income was particularly welcomed by Reginald France, managing director at Boulders Advisors in Ghana.
Speaking at the conference, held in Abuja, Nigeria, on Tuesday, Mr. France said that in a push to stimulate the growth of domestic capital markets, and to encourage increased investment in public equities, the Ghanaian government proposed this year that the maximum allocation to government securities by defined benefit funds be reduced from its current level of 75%. “That's to be decreased to 60%,” he said.
According to slides presented by Mr. France, the proposals increase the allocation to equities to a maximum 20%, from 10%. Alternative investments, which are not permitted under current limits, are would be allowed up to 15% of portfolios.
Speaking on a separate panel, S. Gabriel Shumba, founder, chairman and CEO at alternative manager Group Shumba, highlighted the importance of allocating to alternative investments.
Mr. Shumba also highlighted the role regulators have played in encouraging the development of impact investing on the continent, including helping pension funds in Namibia to diversify away from equities and fixed income, and move into real estate and private equity.
“A lot of regulators (such as in Nigeria) are doing very well in terms of helping pension funds diversify their risk and be able to manage that properly,” Mr. Shumba added.
