Kenya’s Pension Funds Projected To Rebound In 2021

Pension scheme Trustees in Kenya have been urged to diversify their investments in a bid to revitalize the sector that has been impacted negatively by the Covid-19 pandemic.

Speaking during the ongoing Sanlam Investments East Africa conference in Malindi, Capital Markets Authority Chief (CMA) Executive Wykcliffe Shamiah has urged the funds to retool their investment portfolio to maximize returns.

“As a regulator, we support this diversification of investments, and our role to bring back investor confidence. I urge the industry stakeholders to come up with products or innovations, attractive to our youth so that we prepare them to prefer capital markets as an investment option offering plausible returns on investments,” said Shamiah.

The more than 100 pension fund Trustees are in a two-day Conference in Malindi to gauge the Pandemics impact on the market, restrategize on how to shield the market from the further negative impact of Covid-19, and share lessons learned in the adoption and roll-out of new products in the market.

”The sector is yet to recover from losses incurred during the pandemic hence the need to make sustainable investments in the proposed new asset classes. We are looking at diversifying client funds to new investment areas like property, infrastructure bonds, and sustainable developments projects,” said Sanlam Investments Chief Executive Officer Jonathan Stichbury.

The Kenyan pension fund sector is the biggest in the region with over 1.4 trillion shillings worth of savings invested in various asset classes. Last year, pensions recorded increased withdrawals and surrenders due to revenue crunch and Covid-19 induced job losses.

The conference brings together over 100 pension funds from the East Africa region to explore other investments other than traditional asset classes.

Kenya Pension Funds Investments Consortium Head of Secretariat Ngatia Kirungie underscored the need of migrating to new opportunities particularly in the infrastructure sector as it offers competitive returns.  Kirungie tipped the sector to invest more in infrastructure and property that is currently dominated by foreign actors.

The reopening of the economy and new COVID-19 mitigation measures are expected to help in the acceleration of economic growth, which will aid in the recovery of the pension industry. President Uhuru Kenyatta lifted the 10 PM to 4 Am curfew on reduced Covid infection numbers. This is expected to inject more impetus to the business recovery in Kenya.

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