Africa’s growing pension assets present a powerful opportunity to contribute to financing the continent’s own development from within. This was the central message emerging from the “Insight & Impact with Pension Funds: Financing Africa from Within” convening hosted at TDB Tower in Nairobi, bringing together pension fund leaders, development finance institutions, fund managers, regulators, and ecosystem builders to discuss the future of domestic capital mobilisation in Africa.
The evening opened with remarks from Umulinga Karangwa, the Executive Director of one of TDB Group’s fund managers, who underscored the importance of creating practical investment platforms that allow African institutional investors to participate more meaningfully in private capital markets. Drawing from TDB Group’s experience managing over half a billion dollars sourced largely from African institutional investors, she noted that there is already strong demand from pension funds for investment structures that simplify access to private markets.
Umulinga then addressed the stark gap between regulatory allowance and actual allocation. She noted that across the continent, most countries permit pension funds to allocate at least 10% of their assets to private capital, yet actual allocations remain below 1% in many markets. “We are talking about investing 40 times more,” she said, underscoring the enormous work and opportunity still ahead.
This was followed by keynote addresses from Lucy Kioko from Mennonite Economic Development Associates (MEDA) and Fred Mburu speaking on behalf of the Fund Managers Association, who highlighted the urgent need to channel African institutional capital into African businesses, infrastructure, and innovation ecosystems.
The African pension industry currently controls massive capital reserves, with estimates ranging from $700 billion to over $2 trillion. However, the vast majority of these funds remain heavily concentrated in government securities rather than domestic private markets.
Moderated by Winnie Odhiambo, the panel discussion explored the role of Fund-of-Funds structures, local domiciliation, and blended finance solutions in unlocking pension capital for Africa’s private markets. Setting the tone for the evening, Odhiambo used a Ghanaian proverb to illustrate the importance of collaboration across the investment ecosystem.
“Even the best cooking pot will not produce food,” she said. “The ingredients are what produce the meal. Tonight, you are the ingredients.”
She further emphasised Africa’s untapped domestic capital potential, noting that while billions of dollars sit within African pension systems, only a fraction is currently allocated to private capital and alternative investments. She emphasised that the Fund-of-Funds model offers a practical mechanism to aggregate, de-risk, and structure investments in a way that meets fiduciary requirements while supporting inclusive economic growth, pointing to the Mastercard Foundation Africa Growth Fund as a case study.
A recurring theme throughout the discussion was the growing recognition that Africa already possesses significant pools of capital, particularly within pension funds and the mismatch that structural barriers continue to prevent these resources from flowing into the real economy.
Umulinga Karangwa further stressed that although most African pension regulations already allow allocations to private capital, actual deployment remains significantly below permitted thresholds. According to Karangwa, this gap highlights both the need for education and the importance of building confidence through credible investment structures and partnerships. This is why TDB Group conducts regular engagements on the value proposition of this asset class with several types of institutional investors in Africa, but also beyond, namely via its TDB Academy, and the ESATAL asset management company, its wholly owned subsidiary.
From a Kenyan asset management perspective, Ewart Salins highlighted that, “There are a few fund managers that are actually structured to do the Fund-of-Funds approach.” Salins further unpacked that while some larger fund managers have begun exploring Fund-of-Funds strategies, many smaller managers remain structurally unprepared to receive pension capital. He recalled a local fund-of-funds initiative that failed five years ago. This example served to illustrate that while there is interest, the structural and cost barriers remain significant. Noting that “the structure is still new for private capital.” He further pointed to the high cost of structuring these vehicles adding that fewer than ten pan-African fund-of-funds exist today, due to prohibitive fees, governance requirements, and operational readiness continuing to pose challenges for emerging managers seeking institutional investment.
The discussion then turned to domiciliation and the growing movement toward structuring investment vehicles within Africa.
Surrayah Ahmad, Managing Partner at Sabou Capital, shared candid reflections on the realities of establishing locally domiciled investment structures in Nigeria despite the operational and regulatory hurdles involved. Explaining her decision, she joked, “I like to suffer,” before underscoring the strategic rationale behind the move.
She explained that regulatory reforms in Nigeria now prohibit pension funds from investing offshore, making local domiciliation a prerequisite for engaging domestic institutional capital.
Ahmad argued that local domiciliation is not only about regulatory compliance, but also about aligning capital structures with the realities of local businesses and currencies. Referring to the companies in her pipeline she realised, “The companies that we’re seeing to invest in could not absorb USD-based funding. If we invest USD in them, they would not be able to return that capital profitably.”
Ahmad also challenged fund managers across the continent to engage more actively with regulators rather than avoiding difficult environments. “We shouldn’t run away from the difficult problems as fund managers,” she said.
“Unless you try to set up in that local domiciliation where you want to get the local capital, you will not experience the bottlenecks.”
She observed that in Nigeria, even basic concepts like share classes are not yet understood by regulators, making it difficult to set up properly structured funds. Highlighting the need for regulators across the continent to adopt more forward-looking frameworks that support modern fund structures, governance systems, and cross-border investment capabilities.
Building on this theme, Managing Director & Partner of Moremi Platform, Sarah Ngamau noted that more than 60% of Africa-focused funds remain domiciled outside the continent, resulting in the export of value, governance, and decision-making power.
“We are not just exporting the capital,” Ngamau stated. “We are exporting control as well.”
She stressed that African pension capital will only flow meaningfully into private markets when local fund ecosystems are strengthened and trusted governance systems are established. Ngamau also emphasized the importance of supporting first-time and diverse fund managers through acceleration programmes, warehousing capital, shared professional services, and Fund-of-Funds platforms that help bridge institutional credibility gaps.
Sarah then pivoted to the broader challenge of capital flow, using a plumbing analogy. She observed that less than 1% of global funding comes to Africa, yet the continent holds 19% of the global population. “We have a tap with capital trickling into the continent in drips,” she said. “We need to fix the pipes.” Through the Moremi Platform, her team is doing exactly that by building an ecosystem around first-time and diverse fund managers. She explained. “We’re not just looking at the manager as a stand-alone. We have to build an ecosystem around them that is going to make sure they do not fail.”
She also pointed to Africa’s growing demographic advantage as a major opportunity for pension funds.“The pension assets are doubling and tripling in five- to seven-year timelines,” she said. “This could create a flywheel effect where pension funds invest into the real economy, create jobs, and those same young people continue contributing back into the pension system.”
Representing the development finance perspective, Mastercard Foundation’s, Mercy Mutua admitted, “I don’t think we knew what we were getting into,” when highlighting the catalytic role of the Mastercard Foundation in supporting innovative financing structures such as the Mastercard Foundation Africa Growth Fund, that address systemic barriers to capital access.
“Money was not flowing to the African Black woman on the continent,” she noted. “So we said, let’s make it flow.”
She described the Foundation’s approach as intentionally responsive to market realities, including supporting on-continent domiciliation and investing in emerging fund managers often overlooked by traditional capital providers. The foundation’s North Star remains job creation for Africa’s youth, but over time they realized that grants alone were insufficient structural changes in capital markets were necessary to create lasting employment.
Instead of imposing top-down solutions, the foundation let market players identify the real pain points, including that money was not flowing to African women and that capital was leaving the continent due to offshore domiciliation. In response, they simply mandated that 100% of investee funds be domiciled on the continent through this five-year prototype. Mercy emphasized the need for room to experiment, fail, and get back up, noting that perfect solutions would not emerge on day one.
Mutua added that the broader challenge extends beyond domiciliation and reflects larger questions around ownership and control within Africa’s investment ecosystem.“ When we dug into it, it was deeper than that,” she explained. “It was about the power play, who holds the money?”
The panel also explored the critical role of development finance institutions in crowding in domestic capital.
TDB Group is a case in point. The Group rolled out an institutional investor strategy nearly 15 years ago, continuously adapting and expanding it through innovative investment solutions designed to multiply both capital and impact. Today, close to 100 institutional investors – the bulk of them African and many of them pension funds – have committed capital in the Group’s asset management vehicles. This is alongside the many other ways it collaborates with these institutions.
Siongo Kisoso shared insights from Swedfund’s work mobilizing local pension capital through innovative blended finance structures, noting that DFIs alone cannot close Africa’s financing gaps. “If you look at the aggregate balance sheet of all DFIs, it’s small in magnitude to the development needs of the continent,” Kisoso said. “For DFIs to have meaningful impact, we have to mobilize capital.”
He cited the successful launch of the Growth Investment Partners Zambia platform a local currency debt platform anchored by Swedfund, developed alongside local pension institutions and international partners, as evidence that domestic capital mobilisation at scale is achievable when structures are designed around local market realities. Success factors included local domiciliation of the vehicle is registered and regulated in Zambia, a risk-return profile offering returns above the sovereign rate, technical assistance for SMEs, and Swedfund’s willingness to remain open and flexible throughout the process. He concluded that the GIP Zambia model can and should be replicated across the continent.
Siongo emphasized four practical ways DFIs can catalyse local capital through education and knowledge sharing by offering due diligence and market insights as low-hanging fruit, taking first-loss or junior tranches mechanisms like using EU guarantees to de-risk investments, providing technical assistance grants to strengthen governance and compliance and lastly adapting to local needs including domiciliation requirements to improve investability across African markets.
Finally, Siyongo offered a direct call to action. He observed that only a handful of fund managers currently have a dedicated fund-of-funds strategy, and that number needs to increase. He urged everyone in the room to leave with at least one concrete commitment, one action that would drive the discussion forward. By the time they meet again, he hopes to see notable progress.
When asked why deployment remains so slow despite pension funds having long-duration liabilities, Umulinga answered candidly, “All of the above—structural, cultural, attitude.” She elaborated that trustees are genuinely afraid of losing their jobs if they allocate to the wrong manager. That fear is rational, and it is precisely why the fund-of-funds model offers a credible solution by providing professional due diligence, diversification, and risk mitigation. She praised Swedfund’s GIP Zambia initiative as an exemplary model, noting that when pension funds see DFIs and experienced institutions like MEDA (with its North American expertise and a century of combined investment experience) allocating to private capital and fund-of-funds, it builds trust and inspires action. She concluded that the challenge is huge, but the attitude is good, and with continued education and demonstrated success, they can help pension funds increase allocation from 25 basis points to the full 10% that regulators already approve.
Throughout the discussion, panellists repeatedly underscored the importance of collaboration between regulators, pension funds, DFIs, fund managers, and ecosystem builders. Rwanda emerged as a notable example of a jurisdiction actively positioning itself as a competitive African domiciliation hub through investor-friendly tax and regulatory frameworks.
The evening concluded with a collective call to action for stakeholders across the continent to play an active role in building Africa’s investment ecosystem. Participants were encouraged to move beyond conversation and toward practical collaboration that unlocks pension capital for African businesses, entrepreneurs, and development priorities.
As discussions continued during the networking session, one message remained clear: Africa possesses both the capital and the opportunity to finance its own future but doing so will require intentional structures, trusted partnerships, and bold institutional leadership.
