Key retirement industry decision-makers from across Africa have been alerted to huge opportunities and major challenges as jurisdictions in many parts of the continent begin the task of pension reform.

The strategic overview and exchange of information took place last week (Oct 29-Nov 1) in Johannesburg at the Africa Sovereign Pension Fund Summit organised by STANLIB/ Stanbic Investments, a leading South African wealth and asset management company with extensive representation in sub-Saharan Africa.

Uganda was among the nations represented at the summit, believed to be the first private sector, non-governmental forum for exploring models and retirement fund strategies to secure the future wellbeing of Africa's workforce.

STANLIB's ground-breaking event brought together 35 delegates from 12 nations, including Nigeria, Ghana, Uganda, Rwanda, Kenya, Botswana, Lesotho, Zambia, Namibia and Swaziland.

The largest interest group among the delegates were pension fund trustees - the stewards of today's retirement fund build-up and tomorrow's prosperity, according to several conference speakers.

Summit presentations made it clear that international retirement industry models were in a state of flux, that investment risk was ever-present while the role of trustees was becoming increasingly important and challenging.

Mr David Harris, managing director of TOR Financial Consulting, UK, outlined four different approaches to retirement funding: The Anglo-Saxon model (UK and USA) founded on Pay As You Go principles; mandated models (Chile and Australia) characterised by prescriptive regulation and featuring personal income accounts; the national provident fund (Singapore), a government-sponsored healthcare and retirement solution; and the Nordic model (Sweden) that separates a pension fund's operational and investment functions.

An African solution, Nigeria's contributory pension scheme, was described in detail by Yinka Sanni, chief executive officer of IBTC Pension Fund Managers Ltd.

Cross-border harmonisation has become a priority to guard against a totally fragmented approach - as outlined by Jurgen Boyd, South Africa's Registrar of Pension Funds. His description of the work of the Southern African Development Community's Committee of Insurance, Securities and Non-Banking Financial Authorities made it clear that 'harmonised' mobilisation of pension funds and savings is a key element in the region's strategy for regional development and prosperity.

Specific ideas for the use of statutory savings to assist the development of Africa's capital markets were spelled out by Dr Aubrey Muyeke Chimbumba, Director-General of Zambia's National Pension Scheme Authority. He examined the potential for fostering property investment, creating mortgage-based securities, encouraging unit trust growth and providing capital for start-up companies that would ultimately list on national stock exchanges.

Mobilising billions in the interest of members and national economies is a huge responsibility. Errors and slipshod practice can be costly - a theme that was taken up by Jeremy Andrew, Director of Fundela Financial Education.

He explained how a process of risk-based supervision of the retirement fund sector is being developed in South Africa to enable regulators to identify major risks to institutions and intervene when unsafe practices were flagged.

A key regulatory trend was to increase the standards expected of trustees who should be thoroughly acquainted with their duties and the law. This was leading to calls for enhanced powers for regulators, allowing them to take action against individual trustees or service providers.

A crucial service provider is the investment manager. Once again, new developments are evident in investment markets. When it comes to selecting markets for investment, emerging markets and African jurisdictions should not be neglected, a point made by two participants; Stephane Bwakira, STANLIB Africa portfolio manager and Paul Hansen, STANLIB director for retail investing in his review of global markets.

STANLIB CEO George Brits commented at the close of the summit: "We are proud to have contributed to the Africa-wide debate on how to carry pension reform forward and achieve optimum outcomes for African savers and workers.

"The energy and input of delegates from across our continent are a heartening signal that the challenge is being taken up and the opportunities will be grasped. There is much to be done; but the forward vision of all contributors to our conference gives me great confidence that these efforts will not stall and huge progress will be made in the years to come."

The challenge for Uganda is to keep pace with developments in the pension industry right across the African continent. As evidenced above in many African economies, pensions are a key source of economic development.

Mr Owiny is general manager, Stanbic Investment Uganda Ltd