New AVCA report reveals Ghana’s pension funds could unlock over US$1 billion for private capital investment

 

• More than half of Ghanaian pension providers now report exposure to private capital, signalling a shift from cautious interest to active participation.

• 65% of respondents plan to increase allocations to private equity in Ghana within five years, supported by recent policy reforms.

AVCA – the African Private Capital Association, supported by The Chamber of Corporate Trustees of Ghana and British International Investment through the Ghana Investment Support Programme (GHISP), has released the Pension Funds and Private Capital in Ghana report.

The study provides the most comprehensive assessment to date of how Ghanaian
pension funds can drive long-term investment into productive sectors in one of Africa’s
fastest-growing pension markets.

The report underscores the disconnect between the rapid growth of Ghana’s pension industry and its
limited allocation to private capital. With total pension assets under management reaching GHS 86.4
billion (US$6.2 billion) by end-2024, the industry has grown into a key pillar for long-term domestic
savings.

Despite progress made, Ghana falls behind more advanced regional peers in deploying pension
assets to alternatives, utilising just 4.4% of its 25% limit, compared to Nigeria’s 34% usage of a 5%
cap and South Africa’s c.8% allocation under its 15% regulatory ceiling.

This mirrors a wider continental pattern of underutilisation, with many markets yet to seize progressive regulations and maturing investment ecosystems. 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.

Adopting capital allocation strategies aligned with impact and national development priorities, the
report notes that Ghanaian pension funds prioritise investments in healthcare (55%), agribusiness
(45%), and technology (40%).

By asset class, 38% favour real assets such as property and infrastructure, 24% prefer private equity, and 19% are exploring venture capital, signalling a shift from passive accumulation to active deployment. Many favour DFI-backed vehicles (28%) for their de-risking role and co-investment models (22%) that enable shared due diligence and provide investment protection.

While regulatory reforms and new investment directives signal progress, four categories of barriers
continue to limit deeper participation: regulatory constraints, including complex fund licensing
processes; market challenges such as limited investable pipelines; structural gaps in data
transparency and institutional capacity; and GP-related issues, with 89% of pension funds interacting
with fewer than three fund managers in the past year.

65% of respondents intend to increase exposure to private equity within five years. This momentum
is supported by the government’s May 2025 directive encouraging pension funds and insurers to
allocate at least 5% of assets to private equity and venture capital by 2026, signalling a crucial step
toward mobilising long-term domestic capital for development.

The report outlines four strategic priorities to deepen pension participation in private markets:
● Enhancing data transparency and engagement between funds and managers
● Building institutional capacity through targeted training and pooled investment structures
● Deploying blended finance and co-investment tools to mitigate risk
● Advancing regulatory reforms to recognise Limited Partnerships and streamline fund
licensing.

Commenting on the findings, Abi Mustapha-Maduakor, Chief Executive Officer of AVCA, said,
“Ghana’s pension funds are at an inflexion point.

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.

This mirrors a broader shift across Africa, where governments are enacting policies to channel domestic savings into productive investments at home and across borders. With these foundations in place, Ghana’s pension system can become a catalyst for long-term, sustainable growth.”

The report projects a steady increase in allocations over the next five years, positioning Ghana as a
potential leader in pension-led private capital mobilisation across West Africa. The research forms
part of AVCA’s broader Knowledge Exchange Initiative (KEI), a twelve-month capacity-building
programme launched with BII support through GHISP, to strengthen local institutional participation in private markets.

About AVCA
AVCA – the African Private Capital Association is the nexus of private capital in Africa, championing
and enabling private capital investment in Africa.

As the pan-African industry body, AVCA plays a significant role as an effective change agent for the industry and acts as the trusted independent source of information, insight, and intelligence, inspiring investor confidence and making the case for both commercial returns and the impact of private capital in Africa.

AVCA represents a community of capital allocators, investors, fund managers, advisors,
entrepreneurs, and professional services committed to our shared vision of a prosperous Africa that
is sustainable, inclusive, and innovative.