Pensioners' savings could power Africa's growth, lawyers say

For pensioners and policyholders across Africa, the money set aside for their futures may hold a key to the continent’s own development. That is the argument from law firm Webber Wentzel, which says African countries should channel more of their domestic savings into infrastructure and businesses at a moment when development finance is tightening and global investment patterns are shifting, making alternative funding sources more urgent than ever.

The scale of the opportunity is considerable. The Africa Finance Corporation, a multilateral development finance institution that invests in infrastructure and industrial projects across the continent, estimates that Africa holds more than $4-trillion in domestic savings. Within that total sits more than $1.1-trillion in long-term institutional capital, held by pension and insurance funds, sovereign wealth funds and public development banks. Yet much of this money remains parked in lower-risk, short-term instruments rather than flowing into the real economy, according to the AFC.

Webber Wentzel partners Michael Denenga and Mandisa Nduli set out the challenge ahead of the Financial Times Africa Summit in London next week. In their view, the task is to create more credible investment opportunities that allow domestic savings to finance businesses and infrastructure while still giving investors a route to recover their capital.

“International investors and development finance institutions will remain important, but their role should increasingly be to help mobilise and expand African investment rather than substitute for domestic funding,” the partners said.

Why has so much capital stayed on the sidelines? The partners point to the sheer scale and duration of infrastructure investment. Electricity transmission, transport and water projects often demand substantial upfront funding but take years to generate returns. Institutional investors, meanwhile, must weigh potential returns against investment risks and their obligations to the members and policyholders they serve.

Currency mismatches present another obstacle. Projects that earn revenue in rand but borrow in dollars face higher repayment costs when the rand weakens. Denenga and Nduli argue that deeper local capital markets and greater access to local-currency financing could help reduce this exposure.

Project preparation matters too. Where land, permitting, procurement or contractual issues remain unresolved, projects can face delays and higher costs, making investors less willing to commit capital. “Better project preparation and clearer allocation of risk are important to attracting private investment,” the partners said. “Development finance institutions can help address some of these risks and attract private investors, particularly where projects would otherwise struggle to secure commercial funding.”

Meanwhile, regional integration could widen the pool of opportunities by allowing businesses to serve larger markets. The Lobito Corridor, which links Angola, the Democratic Republic of Congo and Zambia, has the potential to connect transport infrastructure with agriculture, manufacturing, mineral processing and regional supply chains. Whether the corridor delivers real economic value, the partners suggest, depends on whether improved connectivity helps retain more value in Africa through local processing and manufacturing, rather than primarily facilitating the export of raw materials.

The African Continental Free Trade Area could play a similar role in helping businesses reach larger markets, though its potential depends on more efficient customs procedures, logistics and cross-border payments, as well as better co-ordination of regulations between countries.

For governments, the partners see a clear role: providing predictable regulation, credible project pipelines and enforceable contracts to attract investment.

“Africa’s domestic savings will not meet all the continent’s infrastructure and development needs,” the partners said. “But channelling more of this capital into viable businesses and projects could broaden funding sources and reduce reliance on external finance.”

Further coverage of the firm’s position appears at https://www.businessday.co.za/companies/2026-10-13-webber-wentzel-calls-for-greater-use-of-africas-domestic-savings/