Currently, an estimated GH¢30 billion from pension funds is tied up in government investments, as disclosed by the Managing Director of Tesah Capital Limited, Eugenia Basheer.
Basheer emphasized that these funds could significantly contribute to the nation’s economic growth if strategically diversified across vital sectors.
Speaking at a forum hosted by Citi TV in Accra, she highlighted the eagerness of foreign countries to invest in Ghana’s pension funds due to their proven benefits.
During the forum themed ‘Clarity in the Chaos: What Lies Ahead for the Ghanaian Economy?’, Basheer expressed concern about a substantial portion of the pension funds, approximately 70 to 80%, being invested in government paper.
She posed a question regarding whether the blame lies with the investors or the pension fund holders for choosing these instruments.
Reflecting on the potential outlined in the Pension Act, Basheer envisioned it as a driver for Ghana’s growth, drawing parallels with other economies where pension funds have fueled development.
She noted that foreign pension funds, even from other African countries, actively invest in Ghana, showcasing the growth and capability of their pension systems.
“Today we have pension funds of over 30 billion, where is it sitting? Unfortunately, I’m sure 70 to 80% is sitting on government paper. There are different sizes to this. Do you blame the investors or the pension fund holders for investing in these instruments?
“The first time I saw the Pension Act before it was passed into law, I thought yes, this is going to drive growth in Ghana because when you look at other economies, that is what has happened. We see pension funds from other economies and even in Africa coming to Ghana to invest here because they’ve grown the pension to the extent that they can invest outside their country,” Eugenia Basheer is quoted by citinewsroom.com.
In light of this situation, the investment expert urged stakeholders in the investment sector to implement measures that would diversify these funds into key sectors of the economy.
This, she believes, would not only stimulate economic recovery but also harness the full potential of the substantial pension funds currently tied up in government investments.