This post was originally published on the Financial Nigeria Website. With 72% of sub-Saharan Africans employed in the informal sector, the traditional pension system is being called into question. The traditional pension system of course works on the premise that members are formally employed, work for 40 years and contribute regularly during this period, resulting in suitable retirement savings.
This Q&A session highlights key insights of a study co-authored by Dr. Jacob Oduor, economist with African Development Bank. The research shows that increased capital beef-up significantly increases financial instability in Africa (except in big banks) implying that higher capital requirements did not make African banks safer. 1.