Pension funds should move beyond passive asset holding and become active drivers of Zimbabwe’s economic transformation through investments in infrastructure, renewable energy, agriculture and small businesses.
Finance, Economic Development and Investment Promotion Deputy Minister Kuda Mnangagwa, officially opening the 51st annual general meeting and conference of the Zimbabwe Association of Pension Funds in Victoria Falls on Thursday, said aligning pension capital with productive sectors was now a strategic imperative for national growth and sustainable retirement outcomes.
The deputy minister said the Government expected pension funds to play a central role in achieving the country’s Vision 2030 ambitions.
“Pension funds have the capacity to drive national development while securing sustainable retirement outcomes.
“Government seeks a sector that prioritises impact investing in renewable energy, agriculture and SME financing sectors that grow the nation while providing inflation-hedged returns for pensioners,” he said.
He said Zimbabwe’s development agenda under the National Development Strategy 2 (NDS2) required sustained economic growth of at least five percent annually, with pension funds expected to mobilise long-term domestic savings into productive investments.
“Aligning pension capital with productive investment is not merely a choice, it is a strategic imperative for our nation’s growth,” he said.
Deputy Minister Mnangagwa said the Government had already strengthened the prescribed asset framework in 2025 to channel pension savings towards key economic sectors while ensuring long-term value preservation for contributors.
He added that authorities wanted a modernised pension industry driven by digital systems, transparency and stronger regulation.
“Our vision for the next five years under NDS2 involves a sector that has fully embraced digital transformation, with IPEC currently working on a single ICT system to centralise member data and improve the tracing of unclaimed benefits,” he said.
The deputy minister said the recent amendments to pension legislation marked a major shift in sector governance, including bringing the National Social Security Authority (NSSA) under the direct regulatory oversight of the Insurance and Pensions Commission.
He said the new law also introduced stricter conflict-of-interest rules, criminal penalties for executives who fail to submit required data and a Statutory Compensation and Protection Fund designed to safeguard pension contributors if a fund becomes insolvent.
“To prevent the depletion of member value, a new National Asset Register mandates that funds provide notice before disposing of significant assets, effectively stopping asset stripping,” Deputy Minister Mnangagwa said.
While commending the sector’s resilience, he acknowledged that the industry continued to face significant structural weaknesses, including rising contribution arrears and delayed benefit payments.
According to the deputy minister, contribution arrears have climbed to ZWG3,28 billion, equivalent to about US$126 million, while unpaid benefits account for 46 percent of complaints received by the regulator.
“It is unacceptable that our members, who have worked for decades, should face delays in payouts due to weak records or fragmented systems,” he said.
Deputy Minister Mnangagwa said the pensions sector had grown to 971 funds serving nearly one million members, with total assets reaching approximately US$3,11 billion by December 2025.
However, he warned that much of the growth had been driven by market valuation gains rather than sustainable cash-generating investments.
“True success lies in shifting from a reliance on valuation gains to sustainable, cash-generative investments that mirror real economic activity,” he said.
He cited examples of pension-backed development projects already underway, including more than ZWG1,2 billion invested in low-cost housing, clinics and solar-powered schools in Masvingo, as well as pension fund participation in hydro-power generation projects feeding into the national grid.
“This is key to economic growth, pensioners’ money building the Zimbabwe they live in today,” Deputy Mnangagwa said.
He urged the industry to work together with the Government to build a pension system that is safe, stable and central to the prosperity of every Zimbabwean worker
IPEC director of pensions, Mr Cuthbert Munjoma, urged pension funds to improve retirement education and confront the growing problem of low contributions caused by non-pensionable allowances.
“People retire expecting benefits linked to their full earnings, yet contributions were based on much smaller pensionable salaries,” he warned.
The regulator also expressed concern over rising appetite for alternative investments and concentrated offshore exposure, cautioning pension funds against herd behaviour and weak due diligence.
“We are seeing increased appetite for alternative investments and there is a need for strong due diligence because investments can fail, especially in alternative spaces,” Mr Munjoma said.
He singled out excessive concentration in offshore investments, particularly in South African stocks.
“Every asset manager is investing in the same shares. We are calling for diversification,” he said.-herald
