Ghana’s decision to bar private pension funds from investing offshore has drawn criticism from industry executives who argue the policy is counterproductive. The National Pensions Regulatory Authority introduced the restriction to curb pressure on the cedi after the government’s debt restructuring, aiming to keep capital within the domestic market. However, pension fund managers say the ban has instead undermined returns and increased exposure to local economic risks, as reported by Reuters.
Industry leaders argue that preventing offshore allocation deprives funds of the ability to diversify and hedge against shocks such as high inflation and currency volatility. Ghana’s private pension sector, which has expanded significantly since reforms in 2010, manages billions of cedis on behalf of contributors. Executives point out that while foreign pension funds are free to invest in Ghana, local funds are denied reciprocal access to international markets, a contradiction they say weakens the system.
“The ban limits our ability to diversify our portfolios and hedge our investments against macroeconomic shocks,” said Afriyie Oware, CEO of Axis Pensions. He stressed that offshore exposure is essential to preserve value, especially when inflation is elevated and the cedi faces downward pressure.
Analysts caution that prolonged restrictions could depress investment performance, erode confidence among pension contributors, and slow growth in Ghana’s retirement savings industry. While regulators defend the policy as a safeguard for financial stability, fund managers maintain that long-term sustainability depends on allowing geographic diversification and clear rules for offshore access.
