President of Seychelles tells forum on pensions that governments, sovereign wealth should harmonise
President of Seychelles, Danny Faure. (State House)
(Seychelles News Agency) - The President of Seychelles, Danny Faure, has called on leaders of African sovereign wealth and pension funds to work closer with governments to finance the infrastructure gap.
Faure made the statement at the African Sovereign Wealth and Pension Fund Leaders’ summit and Infrastructure Awards 2019 in Cape Town South Africa on Tuesday, said State House.
“The annual infrastructure investment gap in Africa is $180 billion a year. That is approximately $150 per African per year. The conundrum is that the $180 billion you put in today will only generate returns to the economy at large, rather than to itself and the returns come over a long period of time,” said Faure.
He told participants at the summit that “both attributes do not bode well for the investor if the investor is not government. However, if pension funds and sovereign wealth funds were to work in close collaboration with governments, this conundrum could be overcome.”
Faure added that in Seychelles, an archipelago in the western Indian Ocean, the investments where the government is an active partner is already at seven percent of the pension funds’ portfolio.
The annual summit is a unique platform to assist domestic and international asset owners, participate in a dynamic investment mandate and policy alignment process. It also engages decision-makers from across the African continent, international financial institutions, regulators and donor organisations to responsibly allocate to infrastructure as an investable asset class.
The African Union members including Seychelles have pledged that all the pension funds in their respective countries will move the investment in infrastructure from 1.5 percent of their portfolios to 5 percent in the next five years.
Faure said that “we are confident that our signal to you to increase it quickly will encourage you to start looking for new solutions.”
Participants from seven of the 14 main Sovereign Wealth Funds in Africa and Pension Funds that cover 70 percent of the total value of Pension Fund assets on the continent attended the summit.
The summit, which is a unique invitation-only to Pan-African Forum for asset owners and institutional investment leaders from across the continent, aims at sharing experiences on innovative investment strategies and infrastructure co-investment partnerships.