Our Comments On Pensions
The Reserve Bank is to be congratulated for taking the initiative of organizing a symposium to rethink the allocation of pension funds which are now more than one billions dollars worth. Pension funds have grown dramatically in Malawi and carefully allocated, they can significantly contribute to the growth of the economy. Thus far the funds have been misallocated, being placed into short-term equities. And in terms of infrastructure, the choice has been shopping malls, a wasteful practice encouraged by South African pensions funds such as Old Mutual.
In other parts of the world pension funds have been used to build railways, electrification, providing office space, housing, etc. We just have to look at the case of Singapore to see how we can go.
There is something perverse about Malawi sitting on huge amounts of money and apparently have no clue what to with the money.
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