ABSTRACT
Many of the central long-term economic problems facing the low and middle income economies of the South relate to worryingly low savings and investment rates, and these problems are particularly marked in sub-Saharan Africa (SSA). Although the synergies between pension funds and capital markets in achieving positive financial sector outcomes are obvious, at least in principle, both the direction of causation within, and the developmental impact of, this pension fund-capital market nexus can easily be misleadingly interpreted or over-stated. The establishment of a mandatory fully funded pension system, whether publicly or privately managed, generates huge quantities of savings very quickly. Although the synergies between pension funds and capital markets in achieving positive financial sector outcomes are obvious, at least in principle, both the direction of causation within, and the developmental impact of, this pension fund-capital market nexus can easily be misleadingly interpreted or over-stated.
