By Alois Vinga
THE pension industry has pinned projected growth plans on the prevailing economic stability after registering 255% income growth in 2020.
Speaking to NewZimbabwe.com Business, Insurance and Pensions Commission (IPEC) commissioner, Grace Muradzikwa said going forward, the sector’s growth will be hinged on sustained economic stability.
“We expect real growth on account of the prevailing economic stability hinged on the current deflationary trend. If this can be sustained, it will go a long way in maintaining insurance and pension values,” she said.
The Reserve Bank of Zimbabwe (RBZ) Foreign Exchange Auction introduced in June 2020 has been largely credited by several companies for stabilising the exchange rates and easing inflation from a high of 837% to 194% at the end of April 2021.
Muradzikwa said the total income for the pension industry grew by 255% to $79.21 billion in 2020 while the industry’s asset base increased by 273% from $30 billion in December 2019 to $110.2 billion in December 2020.
“The income for the period under review was mainly driven by fair value gains and interest from investments. The fair value gains were mainly due to the revaluation of investment properties and adjustment in prices of listed equities,” she said.
In investment terms, fair value gains are a reference to the asset’s prices, as determined by the willing seller and buyer.
It is also a broad measure of an asset’s worth and is not the same as market value.
“On the other hand, the nominal increase in asset base was mainly driven by an increase in the values of investment properties and quoted equities,” added Muradzikwa.