Few global leadership programmes are as prestigious as Harvard University’s Advanced Leadership Initiative – alumni include Thuli Madonsela, the former Public Protector. This programme is now home to Advocate Makhubalo Ndaba, a pension funds professional and Atleha-Edu facilitator, with a big vision.
Makhubalo’s passion for pension fund reform in South Africa is infectious, his commitment to providing best-practice solutions for organised labour is inspiring, and his thesis on bridging the savings to GDP gap of African countries by the year 2050, is admirably ambitious.
Join us as we uncover the story of a South African trailblazer, whose journey is set to inspire and influence many.
Q: Who is Makhubalo Ndaba?
A: Born in Matatiele, I am a villager from the Eastern Cape. My father was an agricultural technician and my mother was a nurse. I attended Roman Catholic schools in the old Transkei and from a young age, I was involved in youth and student movements. I studied law in South Africa and then completed my Master’s degree in Law in the United Kingdom through a British Chevening scholarship, their equivalent of the Fulbright Scholarship. I specialised in employment law and cut my teeth in the mining industry. My focus on labour law brought me into the pension space.
Q: Why did you apply for the programme?
A: Looking at Africa, you can’t help but see the challenges and opportunities. By the turn of the century, 40% of the global population will be in Africa – the birthrate of children born in Nigeria will be equivalent to that of children born in Europe at that time. With 480 million Africans currently living below the poverty line, that number is set to triple if there are no interventions.
I joined the programme to be part of a group that wants to tackle the world’s significant challenges. How are we going to deal with Africa’s population explosion? Is there a pensions story embedded within this challenge? Could this be an unseen opportunity?
Q: So, what is your thesis? What are you working on?
A: I’m looking into Africa’s low pension savings. As a snapshot, Egypt has a 1,2% ratio of pension savings to Gross Domestic Product (GDP), Nigeria has a 4,6% ratio of pension savings to GDP, South Africa 84% pension savings to GDP and Namibia 100% pension savings to GDP.
In comparison, Australia has a 150% ratio of pension savings to GDP and the United States of America 170% to GDP. There are no savings equivalent to their population on the African continent, bar Namibia. In the case of Nigeria, what makes matters more challenging is the huge population of 230 million people.
South Africa has a better scenario. Compared to other African countries, we have enough pension savings to secure local money for infrastructure developments, even if we need to source this from private companies. Nigeria will struggle to find local capital. The only way it can source funding is to secure debt in pounds, dollars or yuan.
Understanding the pension savings to GDP ratio
A 5% ratio of pension savings to GDP means the country’s savings in pension funds amount to 5% of the total value of the country’s overall economic activity over a specific period, usually a year. On average, a ratio of between 20% and 40% is considered healthy for developing countries.
Q: What is the solution?
A: A demographic window has opened for Africa due to its young and growing population; this brings market opportunities and enterprise. When these market opportunities reach maturity, we can reap that dividend through employee savings and pension fund contributions. We need more young people working in a vibrant African economy. If Nigeria’s savings to GDP ratio was 35%, imagine what infrastructure and development could happen!
My first semester has been to understand the politics and economics of Africa and the science behind impact theories and interventions. I am studying how China and India, for instance, were able to harness their demographic dividend.
My objective is to prototype findings in Rwanda and see if, over time, we can increase Africa’s pension savings through long-term employment growth. This, in turn, will increase government spending on infrastructure, creating jobs that will consequently boost pension savings. The additional revenue will help reduce government debt and ultimately lift people out of poverty.
Makhubalo’s career ladder
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