Côte d’Ivoire: Finance – The CNPS picks winners
Many local project backers looking for finance want to get meetings with Charles Kouassi, the director of the Caisse Nationale de Prévoyance Sociale (CNPS). Over the past few years, Kouassi has turned the body that manages the pensions of workers in the private sector into one of the Ivorian economic capital’s most sought-after investors.
Kouassi has taken inspiration from a continental giant, South Africa’s Public Investment Corporation (PIC). He explains: “In the past, our strategy was based on fixed-term deposits. We decided on a new direction that focuses on making profits through investments.” He knows the CNPS well and is a 30-year veteran of the organisation.
Like the PIC, the CNPS has taken stakes in several companies. Most of the investments are in the tourism and finance sectors. The CNPS invested in electricity and water company Eranove in June 2017, and it also has shares in the Ivorian subsidiaries of France’s Société Générale and Morocco’s Attijariwafa Bank. The CNPS bought a stake in Ecobank Côte d’Ivoire in September 2017 during the bank’s initial public offering, and the pension fund now has a seat on the bank’s board.
The CNPS has invested in Seen Hotel Abidjan, which is part owned by the firm Teyliom. Meanwhile, it has also put money into investment funds run by Amethis, Yelen and AfricInvest. The CNPS’s latest investment was in the Mövenpick Hotel in Abidjan in November 2017. The cost of the construction of the 160-room hotel is estimated at 38bn CFA francs ($71.6m).
These ambitious investments would not be possible without reforms launched by the government in 2012. They pushed the retirement age from 55 to 60 and raised contribution rates from 8% to 14% of salaries. The CNPS’s surplus – the value of its assets minus the value of its liabilities – has grown each year since 2012. In 2018, its surplus is due to reach 118bn CFA francs.
In addition to these investments in the private sector, the pension fund typically spends 30bn CFA francs each year on treasury bills and other government investment vehicles. In 2017, its asset base was 300bn CFA francs. Kouassi has set a goal of raising this to 500bn CFA francs in 2020 and 1trn in 2023.
In order to get there, the CNPS would like to see another reform that would allow independent and self-employed workers – estimated at nearly eight million Ivorians – to participate in its pensions. Such a move could help the CNPS to go from its current 700,000 participants to nearly 10 million. The government is due to issue a decision about the pension regime before the end of this year. Most of the country’s workers work in the informal sector, and the CNPS estimates that some 90% of the country’s workers are not covered by social security schemes.
In the meantime, the CNPS is launching a new real-estate development project. It is financing the construction of 32 five-storey buildings that will house 384 apartments in Angré, an area in Cocody.
Other Ivorian pension funds are following suit. The Fonds de Prévoyance Militaire (FPM), the pension fund for soldiers, manages inflows of an estimated 2bn CFA francs per year, making it much smaller than the CNPS. But it too is investing in real estate. It financed the 11.2bn CFA franc construction of the Palm Club Hotel in Abidjan in 2013. The FPM now wants to build a hospital and start a financial institution that can take deposits and issue loans. FPM boss Colonel-Major Konan Kouamé will also be overseeing the development and management of four new military hospitals that the government plans to build with the help of finance worth 41bn CFA francs from the government of India.
This article first appeared in the May 2018 print edition of The Africa Report magazine