Less than 10% of the workers in sub-Saharan Africa save for old age, the lowest rate for any region in the world. That implies most of the breadwinners today won’t be able to afford basic items after retirement. A pension plan is meant to commit employers to make regular savings so that employees will continue to earn after retirement. Pension schemes in sub-Saharan African countries are characterised by low contributions due to low earnings, high informality, high financial illiteracy levels and lack of proper information about the benefits of adequate contributions for future pension withdrawals. Market data shows that South Africa, with pension fund assets valued at about US$330.3 billion in 2019 (latest country update), is the continent’s top performer in absolute terms. Nigeria, which had assets worth US$32.6 billion, Kenya with US$13.7 billion and Namibia with US$13.3 billion were the other top pension savers in 2021.
SOURCE: THE CONVERSATION