“Pension managers need to start exploring alternative investments”

Temitope Mudabai, Associate Vice President of Africa Finance Corporation, recently shared insights on the 7^th PIAFRICA Conference and the vital role it plays in shifting the narrative around pensions and investments in Africa. The corporation has sponsored the event for seven consecutive years, acknowledging its importance in encouraging institutional investors to channel capital towards infrastructure investments and alternative assets which significantly impact the real economy. Temitope Mudabai emphasised that, as inflation continues to erode pension assets, pension managers need to explore alternative investments, such as infrastructure, to counteract this trend. The consortium investment model, which sees pensions forming groups and creating investment pools, emerged as a major takeaway from the event. This shift could instigate change and promote collective investment. Indeed, Mauritius was chosen as the location of the conference due to its large community of asset managers, government support, and focus on alternative investments.

The African continent is currently in the spotlight, particularly concerning pensions and investments. How does the 7^th PIAFRICA Conference fit into this narrative?

The Africa Finance Corporation has been a sponsor of this event for seven consecutive years. It’s crucial to encourage institutional investors in Africa to focus more on channelling their capital towards infrastructure investments and alternative assets. These are assets that impact the real economy. The discussions at the PIAFRICA Conference are highly relevant in redirecting the industry towards these types of investments.

Could you explain the connection between pensions, alternative investments, infrastructure, and growth in Africa?

Inflation is significantly eroding pension assets. Therefore, it’s essential for pension managers to start considering alternative investments that counteract the direction inflation is taking. Infrastructure is an example of such an investment. The more we invest in infrastructure and exporting industries, the more we can manufacture within Africa and export nearly finished goods. This increases the foreign exchange income for African countries and begins to reverse the inflation trend. Pension assets should be focused on these areas to maintain their value and prevent it from dwindling.

What were the major takeaways from the beginning of this event?

It’s intriguing to see that, with the consortium investment model, pensions are acknowledging that they can’t operate independently. They’re forming groups and creating investment pools for mutual education. These could potentially become lobby groups to regulators to instigate change and promote collective investment.

We’re seeing real asset owners. We have representatives from governments, key decision-makers in investment…

This is the seventh edition that AMETrade has organised. How do you think they are driving this narrative?

The team has done an exceptional job. We’ve partnered with them for six of those seven years, and it’s fascinating to see how the conference has evolved. Initially, the focus was on investment advisors and asset managers, but now we’re seeing real asset owners. We have representatives from governments, key decision-makers in investment… the conference has diversified over time and we hope to continue to support it.

Why hold this event in Mauritius? 

I had this discussion with AMETrade. Mauritius is in fact an excellent choice. It has a large community of asset managers and investment advisors. The program is supported by the government of Mauritius, which is at the forefront of alternative investment. They’re also an investor in AFC. So, this is the perfect fit for them. Plus, Mauritius is a beautiful location. So, why not Mauritius? That should be the question.