The Group Chief Executive Officer of Absa Group, Kenny Fihla, has urged a rethink of pension fund investment strategies across Africa, warning that current policies are limiting the continent’s economic potential.

He argued that existing frameworks often restrict where pension savings can be deployed, reducing the flow of long-term capital into productive sectors that could accelerate development across African economies.

Mr Fihla said while safeguarding pension assets and meeting long-term obligations is important, the current approach is not delivering optimal returns or developmental impact.

“Some of the pension fund investment policies actually mitigate against the capital being deployed in the right sectors. Many of these policies restrict where the money can be deployed and secondly make a requirement for a significant portion of these savings to be deployed in investments that are outside of African continent,” he said.

He outlined five priority sectors that pension funds should focus on to unlock growth and long-term value on the continent.

On infrastructure, he said: “I think we should be looking at what we can do to unlock productive infrastructure development. That is, not just delivering the infrastructure project but unlocking the economic potential that can be supported by that infrastructure project.”

On logistics, he added: “Think about logistics. If they are efficient, reliable and if the logistics are connected [supply chains] will work exceptionally well.”

On mining, he stated: “Think about the mining sector and the processing that is required to supply critical minerals.”

On port operations, he noted: “Our own ports should be benefiting from the crisis that is happening in the Middle East.”

He spoke on Channel One TV on Wednesday, April 22.

On high-tech industries, he concluded: “As everyone is talking about AI, data and so on, we need to support infrastructure that helps us to unlock these opportunities and I think pension fund should make sure that their own policies make it possible for these funds to be deployed to these areas.”