The Finance Minister, Ken Ofori-Atta, has revealed that government was planning reforms that will allow banks to issue securities for pension funds, collective investments and insurance investment portfolios.
This, he said, was to ensure that pension funds were used efficiently to address the country’s housing delivery and infrastructure needs.
He noted that, given the long-term nature of pension funds, government believed they can together with other long-term funds, help make long-term funds available for infrastructure development and lend to industry and agriculture.
Mr Ofori-Atta made the revelation when he inaugurated the Board of Directors of the National Pensions Regulatory Authority’s (NPRA’s) in Accra.
He said that the reforms would go a long way to address the situation where a significant amount of pension funds was locked up in short-term banking instruments.
“There is an ongoing industry engagement to enable reforms that will allow banks to issue securities for pension funds, collective investments schemes (CIS), and insurance investment portfolios to participate in.
“This will lead to an estimated over-GH¢300million of debt issuances every month on the Ghana Fixed Income Market by banks – which will, over time, be extended to broader corporate debt issuance,” he said.
Additionally, he said government, intends that pension funds, in addition to other long-term fund sources such as insurance companies’ investment portfolios and CIS – be used more efficiently to solve mortgage, housing delivery, infrastructure, and other long-term needs of the economy.
“With this reform, we hope to assert that pension funds are medium-to-long-term in nature and require long-term instruments.”
“The challenge is that we must start positioning our pension industry to provide that leadership for Ghana, and we must do this thinking about the future of our country and the good we can do for the republic,” he further stated.
Over the past five years, private pension funds have recorded impressive growth – from GH¢0.81billion in 2012 to GH¢11 billion last year – while SSNIT assets stood at GH¢9billion at the close of 2017.
“This phenomenal growth in pension assets under private management calls for the NPRA to better-regulate SSNIT, and also for SSNIT to improve its investment management process,” Mr Ofori-Atta added.
The board is chaired by Mr Paul Simon Koranteng. Other members include: Bright Wireko Brobbbey; Hayford Attah Krufi, NPRA CEO; Rev Daniel Ogbarmey Tetteh; Dr Justice Duffu Yankson; Kwame Ofori-Gyau; and Frederica Iliasu.
The rest are Grace Akrofi; Joseph Nii Noi Adumuah; Reynolds Ofosu Tenkorang; and Ofotsu Tetteh-Kujorjie.
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