By Africa.com | Created at 2026-08-13 16:27:05 | Updated at 2026-08-13 18:16:28
2 hours ago
By Jen MacBruce, Director of Investment Finance, MEDA
There is a peculiar irony at the heart of African development finance. Every year, governments and development partners scour the globe for capital to build roads, finance small businesses and grow local industries. Meanwhile, sitting quietly in pension funds across the continent, is a pool of capital estimated at somewhere between $1.8 trillion and $2 trillion. Almost none of it is working for the continent’s real economy. This was the issue for discussions during session 6 the 7th Annual Africa Pension Supervisors Association (APSA) Conference, held in Accra, Ghana on 30th – 31st July 2026. Most African pension assets remain parked in sovereign bonds and bank deposits. Even where regulation permits pension funds to allocate up to 10% or more to private capital, actual allocations in many markets sit around 1%. The capital is there. It simply is not moving. African pension regulators, trustees and fund managers can no longer afford to ignore the issue.
A capital retention problem, not a capital shortage problem
For years, the standard narrative has been that Africa suffers from a capital shortage, that businesses, infrastructure and climate projects go unfunded because investors elsewhere are unwilling to take the risk. This narrative is incomplete because Africa’s challenge is not the absence of capital; it is the absence of structures that allow the continent’s own capital to find its way into the real economy. Though investment eventually trickles back to the continent, the broader benefits of that capital, the jobs created by fund managers, the fees reinvested locally, the regulatory oversight, the legal recourse when something goes wrong, all stay offshore. Pension regulators lose visibility into how members’ savings are governed. Africa exports not just capital, but the entire ecosystem that capital builds around itself.
Domiciliation: the structural fix hiding in plain sight
Domiciliation, anchoring the investment vehicles that receive pension capital within African jurisdictions themselves, under African regulatory supervision, with African fund managers, African legal recourse and African economic multipliers, is the solution that is staring us in the face. The deeper argument for domiciliation goes beyond fund structuring. When pension capital flows into private equity, venture capital, private credit and infrastructure vehicles domiciled at home, it sets off a virtuous cycle: businesses grow, formal employment rises, wages generate more pension contributions, and that larger pool of domestic capital reinvests into the same asset classes. Over time, countries with deep domestic institutional investors shift from importing capital to generating it. That shift is, in the truest sense, how economic sovereignty gets built.
Where the structural work has been done, the results speak for themselves. In Uganda, the pension regulator is actively scaling allocations into locally domiciled and regional vehicles, working alongside institutions such as National Social Security Fund (NSSF), Uganda Retirement Benefits Regulatory (URBRA) and the Ugandan Capital Markets Authority to build oversight clarity from the ground up. In Ghana, the National Pensions Regulatory Authority (NPRA) has pioneered a domestic capital mobilisation framework that permits pension funds to allocate up to 25% of assets under management to private funds, an active demonstration that supervisors can enable investment and protect member savings simultaneously. In Zambia, a locally domiciled, Swedfund-anchored debt platform is channeling savings into domestic infrastructure while offering above-sovereign returns. None of these are pilots. They are proof that the model works, and a blueprint the rest of the continent can adapt.
What regulators can do, starting now
Domiciliation reduces risk by bringing oversight home, denominating investments in local or hedged currency, and putting dispute resolution under familiar legal frameworks. What it requires from regulators is deliberate architecture: clarity on which fund structures and asset classes qualify for pension investment; governance standards covering licensing, valuation and disclosure; controlled pilots with guardrails before broad rollout; and investment in trustee education so fiduciaries can evaluate alternatives with confidence.This is where APSA has a role to play that no single national regulator can play alone. By enabling regional coordination, common standards, peer learning, cross-border recognition of well-governed vehicles, APSA can shorten the distance between “policy framework” and “actual allocation” for the markets still finding their footing. Ethiopia, Kenya and Nigeria each represent a distinct opportunity: Ethiopia’s rapidly growing pension pool needs the right frameworks built early; Kenya’s mature regulatory infrastructure positions it to lead East Africa’s channeling of institutional capital into regional vehicles; and Nigeria’s vast, still largely untapped pension pool, paired with one of the continent’s youngest populations and largest infrastructure deficits, represents perhaps the single largest opportunity on the continent to convert domestic savings into domestic growth.
Building economic sovereignty, a call to action
The capital exists. The tools exist. The need for jobs, for infrastructure, for climate-resilient enterprise, is undisputed. What has been missing is the regulatory will to connect the three. The decision-makers from about 20 African countries, capable of closing that gap, were in the room at this year’s APSA Conference. The timing, and the evidence, both suggest the moment to act is now.
Jen MacBruce is Director of Investment Finance at MEDA, which manages the Mastercard Foundation Africa Growth Fund’s $150 million fund-of-funds, backing African-owned, African-domiciled investment vehicles across the continent.
