Skip to content
Money

Pension Plan to help Reduce Foreign Debts and Foster Development

BY Soko Directory Team · May 3, 2017 11:05 am
By Amina Faki

The multi-billion shillings pension plan could just be what the government needs to be able to reduce the heavy debt burden.

This could be a better option rather than hurt the ongoing execution of the mega infrastructure projects.

Pension industry leaders said in a meeting last week under the patronage of Making Work for Africa (MFW4A) that the African governments must look for alternative sources of development funds that best suit the interest of the country in the long-term.

According to David Ashiagbor the co-coordinator MFW4A, by keeping a consistent inflow of foreign funds for development purposes we are impoverishing Africa because those funds attract high-interest rates and are prone to foreign currency swing pegged to stringent conditions.

He added that local investors are better positioned to understand the risk hence offering affordable and favorable risk cover.

MFW4A collects and analyzes data before sharing it with AfDB member states to inform on investment choices.

Mr. David talked about mobile money in Kenya and its benefits for Kenyans. He said that it’s a multi-billion shilling annual profits and financial inclusion. Could we have had such a success if foreigners were behind its various uses? Only Kenyans can understand what is best for them and the country.

According to him, a road project worth three billion shillings to 10 billion shillings can comfortably be funded by pension funds once they are guaranteed attractive returns. Governments to hold meetings with financial experts as well as development finance institutions to create infrastructure bond products that encourage pension funds to invest locally.

Kenya had amended its laws to allow the launch of a pilot infrastructure bond that will see local pension funds finance the construction of the Nairobi-Nakuru-Mau Summit Highway, said the acting Chief Executive Retirement Benefits Authority (RBA) Mutuku Nzomo

No foreign funds have ever developed a country, Kenya should refrain from adding more foreign debts and use the national resources there is to further development.

 

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

Trending Stories
Related Articles
Explore Soko Directory
Soko Directory Archives