Pension funds could unlock over $1bn for private capital investment
Ghana’s pension funds hold the potential to unlock over USD1 billion for private capital investment, according to a new report by the African Private Capital Association (AVCA).
The report, titled ‘Pension Funds and Private Capital in Ghana’, and supported by the Chamber of Corporate Trustees of Ghana and British International Investment (BII) through the Ghana Investment Support Programme (GHISP), provides a comprehensive assessment of how these funds could drive long-term investment into productive sectors.
Despite Ghana’s pension industry assets reaching GHS86.4 billion (USD6.2 billion equivalent) by the end of 2024, allocations to alternative investments remain limited at just 4.4 per cent of the 25 per cent regulatory cap.
This underutilisation mirrors a broader continental pattern and contrasts sharply with peers such as Nigeria, which uses 34 per cent of a 5 per cent cap, and South Africa, which allocates 8 per cent of a 15 per cent ceiling.
However, the report noted a changing trend, with 65 per cent of respondents planning to increase allocations to private equity within five years. This momentum is bolstered by the government’s May 2025 directive encouraging pension funds and insurers to allocate at least 5 per cent of assets to private equity and venture capital by 2026.
Ghanaian pension funds are prioritising investments in sectors aligned with national development, favouring healthcare (55 per cent), agribusiness (45 per cent) and technology (40 per cent).
In terms of asset class, 38 per cent favour real assets, property and infrastructure, 24 per cent private equity, and 19 per cent venture capital.
Constraints limiting deeper participation include currency volatility, restrictive investment rules, limited institutional capacity, and complex fund licensing processes.
To unlock this potential, the report recommends 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. AVCA CEO Abi Mustapha-Maduakor emphasised that unlocking this potential requires a combination of “regulatory clarity, institutional capacity-building, and deeper collaboration”.
