Axis Pension Calls for Incentives to Expand Informal Sector Coverage
By Maame Efua Kwaduah
Chief Executive Officer of Axis Pension Trust, Afriyie Oware, has called for policy interventions including government-backed incentives and matching contributions to expand pension coverage in Ghana’s informal sector.
He says current market conditions make it financially unattractive for pension providers to actively target workers in the informal economy.
Speaking to journalists on the sidelines of the 2026 Axis Pension Trust Pension Strategy Conference, Mr. Oware explained that providers face significantly higher costs in acquiring informal sector clients compared to formal sector workers.
“Pension providers are shying away from the informal sector because of the high customer acquisition cost. Currently, based on our assessment at Axis, the cost of acquiring an informal sector client is five times the cost of acquiring a formal sector client. Meaning that someone has to take up the cost.
At the same time, it takes eight years to break even from an informal sector client, but for the formal sector, probably four years you break even. Economically it is not profitable for players to go into the informal sector,” he said.
To address the challenge, Mr. Oware proposed government support in the form of annual grants to pension providers as an incentive to expand coverage to informal workers.
He also suggested a matching contribution model to encourage participation and improve retirement savings in the informal sector.
According to him, formal sector workers benefit from employer contributions, which significantly boost retirement savings, an advantage not available to informal sector workers.
He proposed that government could provide seed contributions for informal sector participants, such as an annual grant or initial support of GH¢100, with beneficiaries contributing a multiple of that amount.
Mr. Oware noted that similar incentive-based pension models have worked in other countries and urged policymakers to consider adopting such approaches.
He cited Rwanda as an example where targeted pension incentives have helped increase informal sector participation.
