The African Development Bank Group has approved $400,000 in grant funding for the Liberia Pension Sector Intervention Project, to support the expansion of pension coverage in Liberia.
The grant is being sourced from the Capital Markets Development Trust Fund (CMDTF), a multi-donor trust fund, managed by the African Development Bank that supports development of efficient and diversified capital markets in African countries. The CMDTF is funded by donors including the Ministry for Foreign Trade and Development Cooperation of the Netherlands and the Ministry of Finance of Luxembourg.
Liberia`s National Social Security and Welfare Corporation (NASSCORP), the only existing pension service provider in country, currently provides coverage to mainly formal sector public service employees. There is thus a gap in coverage for the private sector, and particularly informal businesses.
Under the Liberia Pension Sector Intervention Project, the funding will support targeted reforms of Liberia’s pension sector including an assessment of the current pension system towards development of a national strategy, and capacity building for the pension sector ecosystem, including public and potential private pension sector operators.
The project is expected to enhance the enabling enviroment and support the emergence of domestic institutional investor base, thereby broadening the pension coverage and enabling the pension system to mobilise additional savings for investment, including through domestic financial markets. It will be implemented by the Central Bank of Liberia, which oversees the country’s financial sector.
Hon. Henry F. Saamoi, Acting Executive Governor of the Central Bank of Liberia said, “The CBL appreciates the continued support of the African Development Bank toward the development of Liberia’s pension sector and looks forward to working with the Bank to implement this important reform. The Liberia Pension Sector Intervention Project should enhance Liberia’s readiness for the development of its capital market by institutionalising the investor base, and improving the pension sector’s legal and regulatory environment,” Mr. Saamoi added.
Ahmed Attout, African Development Bank Director for Financial Sector Development said, “We are excited to partner with the Central Bank of Liberia on this operation that is expected to facilitate a reformed pension system capable of mobilising domestic savings, that can be chanelled through financial markets, thereby contributing to deepen the domestic capital markets in Liberia. This aligns with the Bank’s goal of facilitating the emergence of well-functioning capital markets that can efficiently mobilise and allocate savings to fund the credit needs of economic agents and the continent’s development while reducing intermediation costs.”