The CEO of the Non-public Sector Federation, Nana Osei Bonsu, is looking for pension funds in to be redirected towards constructing the nation’s personal sector somewhat than being locked in authorities securities.
Talking on PM Specific on JoyNews, Mr. Bonsu stated the difficulty going through companies is each the excessive price of credit score and the issue in accessing long-term capital.
“Price of credit score is excessive, entry to enough capital formation could be very low, very, essential in the environment. Capital formation is troublesome,” he stated.
He believes the answer lies in how Ghana manages its pension system.
“Our pension schemes present long-term capital for everyone, however now we have sufficient, and that’s one of many areas that we suggest our assembly with the administration staff of the federal government to speak about — how will we improve capital formation?”
Mr. Bonsu defined that the three-tier pension scheme, which the Federation helped develop, was initially designed to permit personal sector participation, particularly within the third tier.
“We now have a three-tier pension scheme, however we’re not accumulating sufficient capital,” he stated.
He added that “personal sector, truly the Federation, was a part of the consortium that developed and sought the three-tier pension scheme.”
He revealed that beneath the present setup, the personal sector holds about 35% to 36% of pensions, however that’s not translating into actual sector funding.
“Authorities participates… particularly the third tier… We wish full participation, further folks taking part, to extend the quantum of assets that go into that.”
He criticised present practices the place pension fund managers and advisors proceed to pour funds into authorities securities as an alternative of productive investments.
“Most of them are investing in treasury payments and treasury bonds. That’s not the personal sector. That’s not the explanation why the third tier was advocated for.”
He argued that if pension contributions had been channelled into native companies, it might flood the sector with capital, ease entry, and produce down rates of interest.
“The capital adequacy is important… If the amount of capital out there to the personal sector is such that you just’ll be begging for funding alternatives, it undoubtedly will make the speed go down.”
Mr. Bonsu’s feedback come as companies proceed to battle with excessive rates of interest and restricted financing choices, regardless of macroeconomic features on inflation and alternate charges.
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