Accra: A new report by the African Private Capital Association (AVCA) reveals that Ghana's pension funds have the potential to unlock over US$1 billion for private capital investment. The report, titled 'Pension Funds and Private Capital in Ghana,' was supported by The Chamber of Corporate Trustees of Ghana and British International Investment (BII) through the Ghana Investment Support Programme (GHISP). It provides a comprehensive assessment of how these funds could drive long-term investment into productive sectors.
According to Ghana News Agency, the report highlights that despite Ghana's pension industry assets reaching GHS 86.4 billion (US$6.2 billion equivalent) by the end of 2024, the allocation to alternative investments remains limited at just 4.4 percent of its 25 percent regulatory cap. This underutilisation is a wider continental pattern, contrasting sharply with countries like Nigeria, which has a 34 percent usage of a 5 percent cap, and South Africa, which utilizes 8 percent of a 15 percent ceiling.
However, the report notes a changing trend, with 65 percent of respondents planning to increase their allocations to private equity within five years. This momentum is bolstered by the government's directive in May 2025, encouraging pension funds and insurers to allocate at least 5 percent of assets to private equity and venture capital by 2026.
The report indicates that Ghanaian pension funds are prioritizing investments in sectors aligned with national development, including healthcare at 55 percent, agribusiness at 45 percent, and technology at 40 percent. In terms of asset class, 38 percent favor real assets such as property and infrastructure, 24 percent are inclined towards private equity, and 19 percent prefer venture capital.
Constraints limiting deeper participation include currency volatility, restrictive investment rules, limited institutional capacity, and regulatory constraints such as complex fund licensing processes. To unlock this potential, the report outlines four strategic priorities: enhancing data transparency, building institutional capacity through targeted training, deploying blended finance and co-investment tools to mitigate risk, and advancing regulatory reforms to streamline fund licensing.
Mr. Abi Mustapha-Maduakor, CEO of AVCA, emphasized that unlocking this potential requires a combination of regulatory clarity, institutional capacity-building, and deeper collaboration.