Mobilizing African Pension Capital for Strategic Investments in Battery Metals
“Discussions frequently highlight insufficient battery metals investment from China, the EU, or the U.S., yet overlook approximately $700 billion in assets managed by African pension funds (OECD). FG Capital Advisors is developing targeted frameworks to responsibly allocate local pension capital toward exploration and processing projects, effectively enabling Africa to advance these opportunities independently.”
— Kenny Kayembe
African pension funds currently manage around $700 billion—a significant pool of long-term capital largely untapped by strategic sectors like mining and infrastructure. South Africa alone accounts for over $200 billion, while Nigeria’s pension assets have grown rapidly, recently surpassing $33 billion (₦15 trillion). In Kenya, pension fund assets are approaching $11 billion (KSh 1.6 trillion) yet remain conservatively allocated.
Despite this growth, current allocations heavily favor government bonds and publicly traded equities. For instance, Nigerian pension funds hold approximately 60% in federal government securities, with less than 1% invested in local infrastructure projects or real-economy assets.
Historically, African pension fund investments have predominantly supported sovereign debt instruments rather than local industries, leaving critical sectors—including mining exploration, mineral processing, and infrastructure—chronically underfunded.
Battery metals (including lithium, cobalt, copper, nickel, and manganese) present a distinct opportunity aligned with pension funds’ inherently long-term investment horizons. While large-scale mining projects are capital intensive, many early-stage projects in Africa—such as exploration, feasibility studies, and mineral beneficiation facilities—require more modest, strategic investments. African pension funds, therefore, have the capacity to serve as cornerstone investors, leveraging their capital to unlock larger international funding commitments.
At FG Capital Advisors, we engage directly with pension trustees, fund managers, and policy influencers, promoting mining investments as responsible, strategic, and aligned with long-term liability management. We advocate rigorous governance, staged risk management, and structured exits, ensuring these investments align precisely with pension funds' fiduciary obligations.
These efforts align closely with policy initiatives such as the Africa Mining Vision and various national local content policies. By allocating even a small proportion of their substantial resources toward strategic mining investments, African pension funds can secure attractive financial returns, advance regional industrialization, and significantly contribute to the continent’s long-term economic prosperity.
