Our Comments on Idle Pension Funds

Is Malawi suffering from the embarrassment of riches? We seem to have accumulated huge savings through our national pension fund now at  (K825.3 billion, representing 16.3 per cent of the Gross Domestic) . RBM projects that by end 2020  pension assets would swell to K1.1 trillion. However, we apparently have no clue what to do with the money.SEE HERE

The Governor of the Central Bank has complained about the low rate of translation of money into a growth-enhancing investment. Only a few days ago, Mr Chihana RBM Chief Examiner for Life Insurance and Pension Funds, said growth in assets has not translated into investments in infrastructure.

 “We have done very well to accumulate the savings but to translate them into infrastructure investment has been a bit of a challenge,” he said.

The new buzzword in development circles is "domestic resource mobilisation" instead of the debilitating focus on attracting aid. We will dance up and down because an IMF mission is coming when we can't find a use for the resources we already have. 

This is not a minor failure. It suggests gross incompetence on the part of those managing our pension funds. The head of the pension fund once suggested that we should export our funds to other countries apparently because there were no investment opportunities Malawi. This calls for a complete overhaul of the management of the pension fund to bring financial experts with some ideal of the great developmental potential of such funds. management of pension funds is not confined to simply receiving funds but also in investing the funds intelligently.  The levels of incompetence in our major financial institutions are simply mindboggling.