Issues for Civil Service Pension Reform in Sub-Saharan Africa

Abstract

The paper summarizes the main factors behind the projected increase civil service pension costs in Sub-Saharan Africa (SSA). It discusses the benefits and potential downsides to unifying civil service and national pension systems, drawing on regional and international best practices and experience. The paper pays special consideration to the differences between civil and national pension reform, emphasizing the unique challenges in civil service pension reform posed by the fact that the government is the employer, the administrator of the pension fund, and the guarantor of last resort of the pension system. Findings in the report strongly suggest that civil service pension reform needs to be on the agenda in SSA countries, as its costs are beginning to crowd out other budget expenditures. Among other conclusions and recommendations, the report also urges practitioners to focus on the overall impact on government finances and not on the finances of the pension fund when undertaking civil service pension reform separately from the national system. The paper is intended to serve as a resource in civil service pension reform efforts in the region.