PENSION industry players in Zimbabwe have been urged to invest in an agrarian economy as the demand for agricultural commodities is ever increasing world over, an academic has said.
Addressing delegates at the third annual Zimbabwe pension funds investment forum at a local hotel on Wednesday, National University of Science and Technology lecturer — Batsirai Mazviona said the current scenario calls for introduction of a new asset class namely commodities largely in the form of agricultural investment.
“The introduction of commodities being complemented by the prescribed assets will contribute significantly in addressing the macroeconomic fundamental problems which include unemployment, balance of payments deficits and economic decline,” Mazviona said.
“Zimbabwe has a massive skills base to assist in making the initiative a success. The demand for agricultural commodities is ever increasing given the growing world population and the surplus commodities could be exported and bring the much needed foreign currency reserves and hence Zimbabwe will be able to service its debts,” he added.
Mazviona said the agricultural activities benefits will cascade to other sectors of the economy such as financial services sector, manufacturing among others, whereas the overall benefit will be improvement of the welfare of the people of Zimbabwe.
According to Mazviona the majority of pension funds’ investments have shifted from equities to property investments.
He also said property investments do not contribute significantly to the overall gross domestic product of a country.
“This is a clear indication that property does not give real value to the pension fund. You may have a large figure of property value yet it’s a liability on its own since you have to pay service providers who are managing that building,” he added.
He also said the government through the supervisory and regulatory authority, has a role to play in ensuring that pension funds contribute immensely to the economic development of our nation.
The success of a pension system or any other system is measured by the amount of investments that have been made in the society and making the society success permanent.
He also said pension funds have a role to play in supporting the agricultural sector, but currently the pension set-up has been more beneficial to service providers rather than the contributors.