FABS 2025

Francophone Africa: The Next Frontier for Telecomms

The African telecoms industry is transforming significantly as operators grapple with maturing markets, increased competition, and economic challenges. Amidst these shifts, francophone Africa has emerged as a key focus area for growth-seeking telecoms companies. Major players like MTN, Maroc Telecom, and Orange are increasingly investing in this region, drawn by its untapped potential and rapid digital transformation. As the African telecoms market evolves, operators are becoming more selective about where they allocate capital and resources. This trend is exemplified by MTN Group’s recent decision to exit Guinea-Bissau, Guinea-Conakry, and Liberia, focusing on stronger markets in francophone Africa such as Cameroon and Côte d’Ivoire. Other operators have also made similar moves, such as Airtel Africa’s exit from Ghana and Etisalat’s pull-out from Nigeria, demonstrating a broader pattern of reassessing market presence and prioritizing investments in markets with the highest growth potential and lower risk

Pension Funds in Francophone Africa

Drawing Inspiration from Nigeria to Boost the Financial Sector The pension fund industry remains relatively unknown in Francophone Africa, while it serves as a driver of economic growth in many countries, particularly Anglophone nations that have successfully established this segment. Pension funds are retirement investment funds established by public or private sector entities. The defining characteristic of these funds is that they are investment vehicles that place the collected contributions primarily into low-risk assets, in accordance with an investment policy mandated by regulations, and they redistribute their assets pro rata to contributions of the participants. These institutions have a low profile in Francophone Africa due to a very different organizational structure: Francophone Africa tends to have national contribution schemes managed by state agencies. Setting aside the comparison of retirement distribution models, if we agree that the mission of Francophone national funds and pension funds is similar, the impact on the dynamism of the financial market and economic development is quite distinct. NIGERIA’S PENSION FUND INDUSTRY: AN ASSET FOR THE ASSET MANAGEMENT SECTOR In Nigeria, for instance, the pension fund industry represents around $33 billion in assets under management, according to 2022 data from the National Pension Commission of Nigeria. Although the retirement coverage rate of the working population is around the African average (roughly 10% of Nigeria’s workforce has retirement coverage), Nigeria, like other mostly anglophone African countries, has managed to build an industry around retirement funds. This industry comprises upstream professions dedicated to collecting and safeguarding these savings (the custodians), and downstream specialized managers who reinvest the savings into the real economy, following strict criteria. COMPARISON WITH NATIONAL PENSION FUNDS IN FRANCOPHONE AFRICA The pension fund industry employs over 30,000 people in Nigeria. Additionally, the regulatory authority’s website provides monthly reports that allow assessment of these funds’ investment sectors. According to the February 2024 report from Nigeria’s National Pension Commission, Nigerian pension funds have invested around 8% of their assets, approximately $1.2 billion, in local company securities, in addition to investments in private equity and real estate funds. Investment in so-called risky assets is limited to protect contributions. In Nigeria, for example, pension funds’ private equity investments are capped at 5%, while some flexibility has been introduced, such as the 2014 regulatory reform that increased the authorized overseas investment percentage from 20% to 40%. POSITIVE ECONOMIC IMPACT OF PENSION FUNDS In Nigeria and South Africa, pension funds have contributed to the economic development. In South Africa, for instance pension funds constitute a major share of the local stock market’s investments, thereby contributing to the financial market’s development. These vehicles could therefore represent an at­tractive model for financing the economy in Fran­cophone Africa. In a context where access to external financing is increasingly difficult due to the global economic crisis, revisiting the role and structure of pension funds in Francophone Africa could transform them into powerful economic development financing tools.