Africa’s patient capital for economic transformation
Staff Writer
Delegates at the annual congress of the Zimbabwe Association of Pension Funds (ZAPF) in Victoria Falls were challenged to rethink the role of pension savings in driving Africa’s long-term economic transformation, with Maxwell Gomera describing the continent’s underutilised institutional capital as “the US$2 trillion question.”
In a presention titled Unlocking Africa’s Patient Capital, Gomera argued that Africa was not short of capital, but rather lacked systems capable of directing long-term savings into productive sectors of the economy.
“Africa is not suffering from a lack of capital. The capital exists. The paradox is the system in which it operates,” Gomera told delegates.
He said African pension funds and institutional investors held close to US$2 trillion in assets, while Zimbabwe’s pension industry alone managed an estimated US$2.6 billion in assets under management.
Yet much of that capital remained concentrated in short-term instruments and government paper instead of productive investments such as infrastructure, renewable energy, agriculture and industrialisation.
Gomera warned that commercial banks were structurally ill-suited to finance long-horizon economic projects because they typically demanded quick returns and collateral, leaving critical sectors starved of affordable long-term financing.
“The real economy requires durations that commercial banks are structurally unable to provide,” he said.
Using the example of a small-scale trader in Kadoma who was denied capital despite building a viable business, Gomera said Africa’s financial systems often failed entrepreneurs not because of a lack of ideas or discipline, but because they lacked “the right capital at the right time.”
He criticised what he termed the “illusion of safety” in pension fund investment strategies, noting that over-concentration in government securities merely preserved wealth in the short term while doing little to expand productive economic capacity.
“What it funds is recurring expenditure and short-term wealth preservation instead of roads, renewable energy, agricultural value chains and long-term industrial growth,” he said.
Drawing lessons from the United Kingdom’s Mansion House reforms, Gomera said global pension funds were increasingly allocating part of their portfolios to private markets, infrastructure and venture capital in pursuit of stronger long-term returns.
He cited Rwanda as an African example already embracing the model, highlighting the launch of a US$100 million SME growth fund anchored by domestic pension capital.
“African capital driving African growth is already happening elsewhere on the continent,” he said.
Gomera also pointed to Zimbabwe’s vast lithium resources, arguing that local pension capital could help finance domestic mineral processing infrastructure rather than leaving value addition to foreign investors.
“Zimbabwe extracts raw lithium while profits and value are exported abroad. Domestic pension capital can help retain those jobs, profits and industrial benefits locally,” he said.
He identified renewable energy, climate-resilient agriculture and critical minerals as some of the biggest investment opportunities for pension funds over the next three decades.
To unlock that potential, Gomera called for reforms that would allow pension funds to broaden their mandates beyond traditional low-risk assets and embrace blended finance instruments, green bonds and infrastructure financing.
He also proposed the creation of a national productive investment platform bringing together pension funds, government, development finance institutions and private investors to structure bankable projects.
In closing, Gomera urged pension funds to redefine fiduciary duty beyond simply protecting retirees’ savings.
“Pension funds should not only protect people from poverty in old age,” he said. “They should help build economies in which the next generation can dream, build, work and age with dignity.”
