20 Dec 2020

The latest audited figures as at end of December 2019 show that the total assets of Pension Funds represented approximately 47 per cent of the GDP, the Minister of Finance and Economic Development, Dr Thapelo Matsheka has said.

Giving an update on the Pensions Performance, Dr Matsheka indicated that the ratio was 42 per cent in 2018 which confirmed the growth of the Pensions Funds industry.
Dr Matsheka said Botswana had 75 stand-alone Funds and six umbrella funds with 320 sub funds. He said the funds had 230 588 members, 21 310 deferred members and 12 693 pensioners.

The income of the  funds in 2019, he said amounted  to P11.8 billion, of which P7 billion was investment income and P4.6 billion was both employer and  employee  contribution.

He said the total expenditure for the funds corresponding period was P3.7 billion of which P3billion was benefit payment.

Dr Matsheka said the assets of the pension funds for the period under review stood at P93 billion which was made up of P57 billion for offshore investment and P36 billion for domestic investment. Listed equities and bonds made up 61 per cent and 17 per cent of the fund’s investment respectively.

He said pension funds experienced a growth of 171 per cent in the last 10 years with growth achieved through contribution inflows and investment returns.

Dr Matsheka stated that pensions funds were currently mandated to invest a minimum of 30 per cent of their assets locally, but off late,  it had been an average of 40 per cent.

He noted that pensions funds had in the past six years earned decent returns, averaging seven per cent annually while the offshore investments contributed the largest portion of the returns recorded.

He said the 2020 audited results were yet to be released but indications were that markets experienced extreme pressure during the period of February and April 2020 as a result of the COVID-19 outbreak.

He said NBFIRA was closely monitoring the industry for the possible effects of the ongoing COVID -19 pandemic as  the regulator continuously maintained close supervision to ensure sustainability of the Pension industry.

Selebi Phikwe West legislator, Mr Dithapelo Keorapetse had requested the minister to give an update on the performance of Pension Funds industry. ENDS