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Home » Third-tier pensions failing private sector – Nana Osei Bonsu laments

Third-tier pensions failing private sector – Nana Osei Bonsu laments

johnmahamaBy johnmahamaJuly 11, 2025 Infrastructure & Development No Comments3 Mins Read
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The Private Sector Federation CEO, Nana Osei Bonsu, is calling for urgent reforms to Ghana’s third-tier pension system, arguing that it is failing to provide the long-term capital needed to grow the private sector.

According to him, the current structure of pension fund investment defeats the very purpose for which the third tier was introduced.

Speaking on JoyNews’ PM Express on Thursday, July 10, Osei Bonsu said cost and access to credit remain critical challenges for Ghanaian businesses, and that weak capital formation is at the heart of the problem.

“The cost of credit is high. Access to adequate capital formation is very low. Capital formation is difficult,” he said.

He explained that long-term capital, particularly from pension funds, is key to driving private sector growth.

But despite the potential of Ghana’s pension system to provide this funding, the capital pool remains insufficient.

“We now have a three-tier pension scheme, but we’re not accumulating enough capital. The private sector avenue, the Federation, was part of the consortium that developed and sought the three-tier pension scheme,” he revealed.

Osei Bonsu noted that under the design of the scheme, the third-tier pension was intended to channel more investment into the private sector, with about 35% to 36% of the total pension pool expected to be non-public sector driven.

However, he expressed concern that the third tier is not being used as originally intended.

“Most of them are investing in treasury bills and treasury bonds. That is not the private sector. That’s not the reason why the third tier was advocated for,” he stressed.

He called for broader participation in the voluntary third-tier segment, including active involvement from government, employers, and employees, to expand the pool of funds available for private enterprise.

“We want full participation, additional people participating, to increase the quantum of resources that go into that,” he said.

“That 30-year portion, that quantum, should be invested in private sector endeavours.”

He argued that if more capital is made available to businesses from pension schemes, competition for funding will decline, which will also push down interest rates.

“If the volume of capital available to the private sector is such that you’ll be begging for investment opportunities, it definitely will make the rates go down,” he concluded.

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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.



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