Top 10 African countries with the most deficient pension situation

With a growing population in many African countries and increased life expectancy, a solid pension system is essential not just for retiree well-being, but also for governments’ long-term economic stability.

Business Insider Africa presents the top 10 African countries with the most deficient pension situation
This list is courtesy of the Absa Africa Financial Markets Index Report 2024.
DRC ranks number 1 on the list.

This absence of adequate pension institutions has far-reaching ramifications, not only for pensioners but also for the countries’ overall economic and financial stability.

Due to an inadequate pension system, many African workers endure financial uncertainty in retirement, sometimes relying on family assistance or working past their prime years.

This diminishes total economic output and puts a further burden on younger generations, who must divert resources to assist aging family members rather than invest for their futures.

Additionally, pension funds play an important role in economic growth by raising long-term capital.

In countries with undeveloped pension systems, there is insufficient funding to support capital market growth.

Local financial markets remain weak due to a lack of pension assets, making large-scale investments in infrastructure, housing, and industrial growth difficult to fund.

The lack of significant pension fund investment in domestic economies decreases liquidity in financial markets.

In countries with undeveloped pension systems, there is insufficient funding to support capital market growth.

Local financial markets remain weak due to a lack of pension assets, making large-scale investments in infrastructure, housing, and industrial growth difficult to fund.

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The lack of significant pension fund investment in domestic economies decreases liquidity in financial markets.

Furthermore, a poorly established pension system exacerbates income disparity and social instability.

When workers do not have appropriate retirement savings, they become more exposed to poverty, increasing the strain on government social assistance programs.

This, in turn, puts pressure on national budgets and diverts resources away from more pressing issues like education and healthcare.

The Absa study rates the accessibility, transparency, and openness of financial markets in 29 African nations based on six major pillars, including pension fund development.

This pillar evaluates the ability of institutional investors to encourage capital market growth by examining the size of pension fund markets, both per capita and in contrast to locally listed securities.

With that said, here are the African countries with the worst pension situation according to the Absa Africa Financial Markets Index.