Ghana’s pension funds could unlock more than $1 billion for private capital investment, according to a new report from the African
Private Capital Association (AVCA), which highlights growing interest and participation in alternative assets among local pension providers.
The report, part of AVCA’s ongoing Knowledge Exchange Initiative (KEi) supported by British International Investment through the Ghana Investment Support Programme (GHISP), finds that more than half of Ghanaian pension providers now report exposure to private capital, signaling a shift from cautious observation to active participation.
About 65% of respondents said they plan to increase allocations to private equity within the next five years, encouraged by policy reforms — including a May 2025 government directive urging pension funds and insurers to allocate at least 5% of assets to private equity and venture capital by 2026.
AVCA’s assessment reveals that despite the growth of Ghana’s pension industry — with total assets under management reaching GHS 86.4 billion (US$6.2 billion) by the end of 2024 — the sector remains underexposed to private markets. Ghanaian pension funds currently use just 4.4% of their 25% regulatory limit for alternative investments, compared with Nigeria’s 34% usage of a 5% cap and South Africa’s roughly 8% allocation under a 15% ceiling.
“This gap illustrates how Ghana’s pension system, despite its size and sophistication, remains underexposed to productive investments that could strengthen private sector growth and reduce reliance on short-term securities,” the report said.
Emerging Priorities and Barriers
According to the report, Ghanaian pension funds are prioritizing impact-driven investments aligned with national development goals. The top sectors include healthcare (55%), agribusiness (45%), and technology (40%). By asset class, 38% favor real assets such as property and infrastructure, 24% prefer private equity, and 19% are exploring venture capital.
Many investors prefer development finance institution (DFI)-backed vehicles (28%) for their risk-mitigation features and co-investment models (22%) that promote shared due diligence and capital protection.
Despite these trends, pension providers cited currency volatility, restrictive investment rules, and limited institutional
capacity as major challenges. The report identified four key barriers to deeper private market participation:
Regulatory constraints, including complex fund licensing processes.
Market challenges, such as a limited pipeline of investable projects.
Structural gaps in data transparency and institutional capacity.
Fund manager access issues, with 89% of pension funds engaging with fewer than three fund managers in the past year.
Strategic Priorities for Growth
AVCA outlined four strategic priorities to unlock Ghana’s pension-led private
investment potential:
Improve data transparency and engagement between funds and managers.
Build institutional capacity through targeted training and pooled structures.
Use blended finance and co-investment tools to mitigate risk.
Advance regulatory reforms to recognize limited partnerships and streamline licensing.
A Turning Point for Ghana’s Pension Industry
“Ghana’s pension funds are at an inflection point,” said Abi Mustapha-Maduakor,
AVCA’s chief executive officer. “The data highlights both the scale of investable domestic capital and the practical barriers that continue to hold it back. Unlocking this potential will require a combination of regulatory clarity, institutional capacity-building, and deeper collaboration between fund managers and local investors.”
Mustapha-Maduakor added that Ghana’s progress mirrors a broader shift across Africa as governments encourage domestic savings to flow into productive investments that drive sustainable growth.
The report projects steady increases in private capital allocations over the next five years, positioning Ghana as a potential regional leader in pension-led private capital mobilization across West Africa.
About AVCA:
The African Private Capital Association (AVCA) is the pan-African industry body championing private capital investment across the continent. AVCA provides research, advocacy, and capacity-building to strengthen investor confidence and demonstrate the commercial and developmental impact of private capital in Africa.
By Kingsley Asiedu
