Pension industry challenged to move beyond property investments
Staff Writer
CBZ Holdings group chief executive Lawrence Nyazema has urged Zimbabwe’s pension industry to redirect long-term savings into productive sectors of the economy, warning that excessive focus on defensive investments was limiting economic growth and retirement value creation.
Speaking at the Zimbabwe Association of Pension Funds annual general meeting and congress in Victoria Falls, Nyazema said Zimbabwe was not short of capital but faced challenges in mobilising domestic savings into bankable infrastructure and industrial projects.
He said Africa held more than US$4 trillion in domestic capital across pension funds, banks, insurers and sovereign wealth funds, but much of it remained concentrated in low-risk government securities, property and cash investments.
“The core issue is not capital availability, but whether we can organise existing domestic savings and deploy them through effective financial intermediation into productive national assets,” Nyazema said.
According to figures presented at the conference, Zimbabwe’s domestic capital pool exceeds US$26 billion, including US$16 billion in sovereign-linked assets under the Mutapa Investment Fund, while pension fund assets stand at about US$2,8 billion.
Nyazema said pension funds remained heavily concentrated in property, which accounts for 35 percent of total allocations, while investment in bonds stood at just two percent and money market instruments at five percent.
“Zimbabwe’s biggest capital problem is trust,” he said, adding that pension funds had evolved into “survival systems” focused on inflation hedging and liquidity preservation rather than long-term investment.
He said prescribed asset requirements alone would not unlock infrastructure financing unless supported by transparent and commercially viable investment structures capable of attracting institutional capital.
Nyazema called for the creation of infrastructure special purpose vehicles, infrastructure bonds, commodity exchange traded funds and agriculture-focused investment instruments to channel pension savings into productive sectors.
He also urged consolidation within Zimbabwe’s fragmented pension industry to create larger institutional investors capable of undertaking direct investments at lower cost.
The conference also heard calls for pension funds to play a broader developmental role in line with Zimbabwe’s Vision 2030 agenda.
