Private Sector Federation CEO calls for urgent reform of Ghana’s Third-Tier Pension Scheme
11th July 2025
Chief Executive Officer of the Private Sector Federation, Nana Osei Bonsu, is calling for urgent reforms to Ghana’s third-tier pension system, arguing that it is not delivering the long-term capital needed to fuel private sector growth.
Speaking on JoyNews’ PM Express on Thursday, July 10, Osei Bonsu said the current structure of pension fund investment undermines the original intent of the third-tier system—designed to support private enterprise with accessible, long-term financing.
“The cost of credit is high. Access to adequate capital is very low. Capital formation is difficult,” he said, highlighting the pressing financial challenges facing Ghanaian businesses.
According to him, while Ghana’s three-tier pension scheme was introduced to create a sustainable pool of investment capital for the private sector, it has fallen short of its objective.
“We now have a three-tier pension scheme, but we’re not accumulating enough capital. The Private Sector Federation, which I lead, was part of the consortium that helped design this structure to channel funds into private investment,” he explained.
Osei Bonsu noted that approximately 35% to 36% of the pension pool is held outside the public sector. However, much of this capital is being diverted into government securities such as treasury bills and bonds, rather than being invested in productive private sector ventures.
“Most of the funds are going into treasury bills and bonds. That’s not the private sector. That’s not why the third tier was created,” he stressed.
He urged for increased participation in the voluntary third-tier scheme—from government, employers, and employees alike—to expand the capital base available for business development.
“We need full participation. The more people join, the larger the quantum of funds we can direct toward private sector growth,” he said. “That long-term portion of pension savings—those 30-year resources—should be invested in private sector initiatives.”
Osei Bonsu argued that with greater access to pension-backed capital, businesses would face less competition for loans, leading to a natural reduction in interest rates.
“If the volume of capital available to the private sector is so large that people are scrambling to find viable projects to invest in, interest rates will go down,” he concluded.
His remarks come as many Ghanaian businesses continue to face steep borrowing costs and limited access to long-term financing—despite the macroeconomic recovery showing signs of stability.