Pension funds back economic shift
Kabelo Boranabi | Wednesday March 25, 2026 06:26
The country's pension funds, valued at over P166 billion, have been eyed by policymakers as a possible driver of economic growth if channelled to domestic assets to support the country's economic plans. Recently, during the Botswana Pensions Society (BPS) Annual Congress, policymakers reiterated this notion, highlighting the imperative role pension funds can play in unlocking economic diversification.
Delivering remarks on behalf of the Vice President and Minister of Finance, Permanent Secretary Gape Kaboyakgosi said Botswana’s economic model is at a turning point. Whilst the diamond-led growth model has delivered stability for decades, he said diversification has slowed, with unemployment and inequality rising, making it urgent for the country's diversification drive to find alternative financing models.
“To sustain inclusive growth, we must deepen and broaden our economic base,” he said, adding that pension capital will be key in financing infrastructure, digital systems and productive sectors. From a continental perspective, Alfred Ouma Shem of the Africa Pension Supervisors Association said pension systems must evolve to meet both social and economic demands.
“Pension capital is a strategic national asset capable of shaping the societies we want to build,” he said, noting that low pension coverage across Africa remains a major challenge due to the dominance of informal employment.
Recently, the Botswana Public Officers Pension Fund (BPOPF) loaned the government P3 billion as a short-term loan to address recurrent needs, highlighting the evolving nature of pension funds in capital markets and funding the country's economic aspirations.
Attention also turned to Botswana’s infrastructure gap, with Gomolemo Basele, Country Economist at First National Bank Botswana, warning that government alone can no longer meet financing needs. He said sectors such as energy, transport, water, and ICT present opportunities for pension funds, but stressed that implementation challenges continue to delay projects.
“The challenge has not been capital, but execution,” Basele said. A panel moderated by Tapologo Motshubi, featuring Kennedy Manopolwe, Botlhe Tshukudu, and Mbaki Wotho, highlighted growing global risks, including geopolitical tensions and market concentration. They emphasised that disciplined investment processes and diversification, particularly into alternative assets such as infrastructure and private credit, remain key to navigating volatility. On governance, Kgomotso Beleme of Alexander Forbes said pension funds must prioritise meeting long-term liabilities rather than reacting to short-term market movements.
She noted that Botswana’s pension replacement ratio has improved significantly over the past decade, but warned that poor governance could erode those gains. Discussions also focused on expanding pension coverage to include informal sector workers, with experts calling for more flexible, technology-driven solutions.