This archive report was first published on 22 October 2021.
Published on October 22, 2021, the Kenyan pension fund sector is facing a significant challenge due to the Covid-19 pandemic. The sector, worth over 1.4 trillion shillings, has seen increased withdrawals and surrenders due to revenue crunch and job losses.
Capital Markets Authority Chief Executive Wykcliffe Shamiah has urged the pension funds to retool their investment portfolio to maximize returns. Speaking during the Sanlam Investments East Africa conference in Malindi, Shamiah emphasized the need for diversification, stating, “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.”
Sanlam Investments Chief Executive Officer Jonathan Stichbury also emphasized the need for sustainable investments in new asset classes. He noted that the sector is yet to recover from losses incurred during the pandemic and that diversifying client funds to new investment areas like property, infrastructure bonds, and sustainable developments projects is crucial.
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 for migrating to new opportunities, particularly in the infrastructure sector, which offers competitive returns.
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's decision to lift the 10 PM to 4 AM curfew is expected to inject more impetus to the business recovery in Kenya.
