Africa’s retirement funds stand at an important point in their evolution. The primary question before trustees remains whether an investment strategy can deliver appropriate financial returns for members. That responsibility is non-negotiable. Yet in a world of energy insecurity, infrastructure deficits, climate risk and rapidly changing member expectations, another question has become increasingly important: can members’ long-term savings also help build the society in which they will retire?
This is why the Institute of Retirement Funds Africa (IRFA) supports the continued development of investment practice and responsible opportunities for retirement funds to participate in infrastructure. Infrastructure is relevant to pension funds because it is long term by nature. Well-structured energy, water, transport, digital and social
infrastructure assets can produce predictable cash flows over many years. This can align with retirement funds’ long-term liabilities and provide diversification beyond traditional listed markets. The best infrastructure investments are therefore not charitable allocations, nor substitutes for disciplined portfolio construction. They should earn market related, risk adjusted returns while demonstrating measurable benefits for communities, members and the economy.
South Africa’s regulatory environment now recognises this potential more explicitly. The 2022 amendments to Regulation 28 of the Pension Funds Act enabled and referenced longer term infrastructure investment, introduced a definition of infrastructure and set an overall 45% limit for infrastructure exposure. Importantly, these changes did not prescribe where funds must invest. The final decision remains with trustees, who determine each fund’s investment policy. Responsible infrastructure investing must therefore remain trustee led, evidence based and aligned to each fund’s objectives.
For trustees, the practical test must be rigorous. A suitable infrastructure investment should have a credible sponsor, transparent ownership, independent valuation, appropriate liquidity expectations, robust contracts, clear governance, professional management and well defined risk allocation. It should also provide credible reporting on financial performance and impact. Members increasingly want to know where their money is invested and whether it is contributing to positive societal outcomes. Infrastructure can answer that question, provided funds avoid vague claims and insist on measurable evidence.
A South African or sub-Saharan infrastructure opportunity should be evaluated through two connected lenses. The first is the investment lens: expected return, risk, liquidity, fees, inflation sensitivity, currency exposure, counterparty strength, regulatory certainty and portfolio fit. The second is the impact lens: who benefits, what services are improved, what risks are reduced, how outcomes are measured, and how those outcomes are reported to members. Neither lens can be optional. An investment that delivers social benefit but fails to meet fiduciary standards is unsuitable for retirement savings. Equally, an investment that earns returns while weakening public trust, harming communities or obscuring risk cannot be regarded as a model for responsible long-term capital.
This approach is especially important in sectors such as renewable energy, water security, transport logistics, affordable housing, healthcare infrastructure and digital connectivity. In these areas, the needs of society and the long-term interests of members may intersect. The point is not to promote any particular project or provider. It is to develop disciplined investment practice that enables trustees to distinguish between bankable, well governed opportunities and projects that do not meet the standards required for members’ money.
The broader African context strengthens the case. Across the continent, infrastructure needs are substantial, while pension funds represent long-term capital that can be aligned with development priorities. FSD Africa has observed that infrastructure projects can generate long-term revenue streams, such as electricity sales or toll fees, which may support future retirement payments while improving energy access, transport connectivity and public services. For African retirement funds, the opportunity is not only to invest in assets, but to help shape standards for governance, transparency and accountability.
This is precisely why the forthcoming IRFA 2026 Conference, under the theme “A New World – A New Normal”, is so timely. The conference will address the dual transformation facing African retirement funds: a changed global order and evolved member expectations, including demands for transparency and meaningful societal impact. Its concept note specifically asks how trustees should evaluate infrastructure investment opportunities and how impact measurement should be communicated to members.
IRFA believes that the retirement industry is strongest when it learns together. Trustees, fund executives, consultants, administrators, investment managers and regulators all have a role in building a market where infrastructure opportunities are investable, accountable and aligned with member outcomes. The opportunity before us is not to choose between returns and impact. The opportunity is to insist on both.
In a new world, retirement funds must remain anchored in prudence, independence and fiduciary duty. But prudence should not mean standing still. Done responsibly, infrastructure investment can help funds earn competitive long-term returns while contributing to the electricity, roads, water systems, digital networks, schools, clinics and communities that members need in retirement. That is not only good investment practice. It is part of building a more secure and inclusive future for Africa.