The state of the infrastructure on the African continent is something that don’t need data to understand. The airports, the roads, the ports, the situation in the power industry around Africa, a huge deficit and its ever increasing, especially with the increase in the population in terms of the trade that’s beginning to happen between the countries, the gaps and the infrastructure keeps hitting more and more. On a conservative basis, depending on which numbers, the infrastructure gap in actual financial terms in Africa is anywhere between $100 billion just to keep it to its current levels. In terms of what it’s required for it to reach certain averages that the world aspires to, a trillion plus dollars of investments in infrastructure. Africa’s population is very young, and most pension funds in Africa are defined contribution plans. If it’s young, it means that liability profile is over a long time, which means one can invest over the long time. A longer-term horizon, which is what infrastructure assets are all about. Secondly, the other factor is the liquidity requirements, need to make sure that there is an ability for pensions to be paid when it’s required. Infrastructure assets, if it’s structured properly can create the cash flows that is required to pay for the pensions when it’s due.
Africa is a very young continent. The demographic profile tells that more than 60 or 70 percent of the population are below the age of 20 or 21. Pension funds across the continent are being set up, are being regulated well, and cash flows are generating. This means there’s a lot of money coming in. If a young population which will need to be catered for, ultimately in 30- or 40-years’ time,have the time horizon, unlike, Europe in favor to invest in the long term. Secondly, most pension funds in Africa are defined contribution plans, which means a pension that to get is a function of the investment returns generated. Nobody’s giving a guaranteed pension fund. So again, therefore, trustees, asset allocation consultants, fund managers, employers have to by definition encourage pension funds to go into real assets, which earns real income over time, so that the pension that a person gets 30 or 40 years down the line is something real, something that makes a difference to a retired life. The industry is there, the regulation is there and the institutions are there. The mindset has to start changing and the recognition has to be given, that by being ultra conservative and buying Treasury bills.