Chairman for the World Pension Summit, Harry Smorenberg, has said that Africa has the potentials of leapfrogging the developments taking place in other countries.
Smorenberg, who was speaking on Channels Television’s Sunrise Daily on Monday on the commencement of the World Pension Summit for Africa holding in Abuja, said that by learning and sharing best practices, Africa can set a new pace by being a leader in social security and pension market development in the nearer future.
“The agenda for the pension market development for Africa is challenging and this is the first step where we provide a platform where we can exchange truly, expertise from not mainly African countries but also from outside Africa because in my view, Africa can really leapfrog on the development taking place in other countries.”
He revealed that there would be a lot of messages in the summit on strengthening the social security system as it was the base for securing people. He explained that this was all about managing people, having equal right and avoiding social unrest which makes pension market development crucial and important as people have to feel safe to save money for their future.
On the credibility and transparency of the pension market development and measures to be put in place for a lot of people to buy in to the scheme, especially for a young Nigerian market, Mr. Smorenberg emphasized the importance of education and understanding that saving money for later is better.
“If we can educate people, which is where our financial literacy comes in, and have kids in school understand what interest is and the effect of inflation on your savings, which are complex things to understand, then it would be better.”
In what he described as ‘Personal Economy’, he reiterated that they were very simple basic steps which should continue each year at school for people to have the perfect enlightenment about the pension market development.
On how the scheme covers the informal market, Mr Smorenberge was of the opinion that the crucial part is the participation of the employers, “It will be essential, also in due cause in Africa, that labour is scarce and will become more scarce, so you have to cherish your assets and your people that are working for you. So you should also try to prepare for them a valuable pension build up”.
On whether it was possible to use two PFAs to manage one account, he believed that this would depend on technology, getting the insights and the alignment of the two funds. ”People should be able to physically have control over the two funds as it is about transparency and how they can exist”, he said, adding that there were various people with several pension build up in Western Europe and the essence of it is how one can aggregate such information to the individual or participant in order to have them gain control over the insight on their financial position.
Mr Smorenberg also spoke about how people who are artisans can benefit from the pension scheme. He disclosed that the pension fund is offering special programs for self-employed people. “It is a societal role and an obligation from the Government, from the employers of organization and the actors in the social feed to ensure that people are saving money for later”. He stated that Government should make it mandatory.
He, however, predicted that Nigeria and other African countries would go through the same phase that European countries went through at the early stage of the pension scheme but citizens would be better for it.
The World Pension Summit for Africa holds from Monday, July 7 to Tuesday July 8 in Abuja.
