In a modest workshop on the outskirts of Accra, the hum of machinery competes with the chatter of young mechanics bent over the frame of a locally designed electric vehicle. Their leader, Adutwum Hagar Adutwumwaa, an engineer at Wahu Mobility, has long dreamed of building affordable, battery-powered transport in Ghana. ‘It has been an amazing journey… I have learnt new things. Now I make batteries from recycled lithium iron cells,’ she explained. But like many entrepreneurs before her, she has faced an unforgiving reality: capital is scarce, loans come with crushing interest rates, and investors rarely back risky ventures.

Now, that reality may be shifting. In 2025, Ghana introduced a groundbreaking pension reform that will direct 5% of the country’s GH₵50 billion pension assets into start-ups and Small and Medium Enterprises (SMEs). The policy, championed by the National Pensions Regulatory Authority (NPRA), is as ambitious as it is controversial and has transformed a technical policy debate into a national conversation.

By turning retirement savings into investment capital, Ghana hopes to spark entrepreneurship, generate jobs, and keep innovation at home rather than abroad. Yet for every cheerleader, there are skeptics warning of potential risks, risks that hit hardest for workers and unions, for whom the very idea of backing high-stakes businesses with retirement savings provokes deep anxiety, a tension recent events have only sharpened.

Why Pensions, Why Now?

Since 2008, Ghana’s pension system has largely followed a conservative path. Most funds sit in government securities, secure and liquid, but far from transformational. The 2008 National Pensions Act established a three-tier framework: Tier One, managed by the Social Security and National Insurance Trust (SSNIT); Tier Two, run by private firms; and Tier Three, voluntary schemes. While this structure laid a solid foundation, millions of informal workers, market women, drivers, artisans, and creatives remain outside the safety net, leaving many exposed to financial insecurity in old age. Initiatives like the Self-Employed Enrolment Drive (SEED) are now expanding coverage to these groups.

For years, pension funds have largely recycled into Treasury bills and bonds. These financial products, although secure, offer negligible impact on broader economic growth. Recognising this under-utilization, the NPRA in 2025 launched a phased approach to open pension assets to alternative investments. By unlocking about GH₵5 billion of existing pension assets, pensions are now being used as ‘patient capital’ to fund innovation-driven start-ups SMEs, supporting both contributors’ futures and national development.

Opportunities for Growth: Where the Money Could Go

Although Ghana’s youth make up more than half of the population, many are unemployed or underemployed. For them, lack of access to finance has long been a major hurdle. Now, the 2025 pension reform could ease this bottleneck and unlock new opportunities.

For entrepreneurs like Lawrence Akakpo, an electric bike rider with Wahu Mobility, the shift feels transformative. ‘I ride almost the whole day; even at night … I make between GHC100 depending on the market,’ he said, reflecting how new industries are opening opportunities for ordinary workers.

Priority sectors include agriculture, where digital platforms are modernizing farming; renewable energy, with clean transport solutions gaining ground; and technology, particularly Fintech, which already positions Ghana among Africa’s digital leaders. Financial experts see strategic value in this direction. ‘If managed well, pension capital in Agro-tech and renewable energy can unlock a cycle of growth that reduces unemployment and stabilizes the economy,’ noted Isaac Simpson, Manager of Financial Advisory at Stanbic Bank Ghana. ‘But this requires robust governance and innovative instruments to cushion risks.’

Policymakers see the pension reform as a chance to channel funds into areas that can drive inclusive growth and jobs. Agriculture firms like Farmerline and Esoko, renewable energy innovators such as SolarTaxi, and Ghana’s thriving Fintech sector are clear examples. Attention is also turning to startups and light manufacturing, where pension-backed investment could have multiplier effects. The goal is to use pensions not just to preserve wealth but to create employment, strengthening local industry in the process.

Private-sector leaders agree much of the pension pool remains in Treasury bills and bonds. ‘That is not the private sector,’ said Nana Osei Bonsu, CEO of the Private Enterprise Federation in remarks reported by MyJoyOnline, urging funds to flow into productive businesses. Evidence shows it works: the Venture Capital Trust Fund (VCTF) has invested over GH¢359.6 million in local enterprises, leveraging private funding and creating jobs according to Graphic Online, while the Ghana Venture Capital &Private Equity Association (GVCA) and partners have committed to mobilize domestic capital through conferences and compacts.

The Voices of Concern

While the pension reform opens new avenues for growth, key stakeholders are urging caution, reminding policymakers that high potential comes with real risks. Unions, for instance, stress that pensions are not meant for high-risk ventures. Dr. Kwabena Nyarko-Otoo of the Trades Union Congress (TUC) warned that ‘they are not venture capital,’ while Franklin Owusu Ansah of the Health Services Workers’ Union (HSWU) added that trust has been repeatedly broken in pension management. 

Most recently, Kwesi Adu-Amankwah, former General-Secretary of International Trade Union Confederation (ITUC) Africa, underscored that pensions are workers’ salaries, not government resources, urging comprehensive actuarial studies before diverting funds into high-risk investments. His remarks at The Trades Union Congress (TUC)’s 80th anniversary lecture, as reported by news Ghana, underline how live and contested this policy has become.

Business leaders expressed similar concerns. Nana Osei Bonsu has also lamented that the voluntary third tier has not accumulated enough resources to power industry. ‘We want full participation, additional people participating, to increase the quantum of resources that go into that,’ he said.

Afriyie Oware, CEO of Axis Pensions, warned that over-reliance on government securities is ‘risky and unsustainable,’ calling for ‘deep structural reforms’ to diversify investments and safeguard returns. These warnings resonate with broader discussions at the recent Pension Investment Strategy Conference, where participants concluded that Ghana’s pension system needs a deep structural reset after years of low returns and over-concentration in government bonds.

Safeguards & Governance: Protecting Workers’ Retirement Money

In response to public anxiety, regulators and industry leaders insist the new pension strategy will not sacrifice security for growth. The NPRA says it is phasing reforms carefully, tightening fund-manager licensing rules, and creating independent oversight committees. It has also rolled out digitised reporting so contributors can monitor their savings, while consulting on revised guidelines that allow controlled exposure to alternative assets according to Business and Financial Times reports in its ‘New Rules for Pension Fund Innovation’ piece from May 2025.’

Union voices underline the need for vigilance. According to the Afrobarometer Round 10 survey (2024), only 42% of Ghanaians express trust in public financial institutions, while 38% of youth aged 18–35 are confident that pension funds will be managed responsibly. ISSER data (2023) further highlights that formal-sector employees are more likely to enroll in pension schemes when transparency and governance mechanisms are robust.

Reflecting this concern in practice, Isaac Bampoe Addo, Executive Secretary of Civil and Local Government Staff Association of Ghana (CLOGSAG), confirmed that over GH₵3.1 billion in Tier-2 funds had finally been transferred into union-run custodial accounts. He described this step as proof that ‘workers’ pensions are safer in the hands of trustees they can hold accountable. Yet unions remain watchful, with the Public Services Workers Union (PSWU) recently warning that any breach of the MOU with government on pensions would trigger strong action, reinforcing the demand for credible safeguards.

From within the pensions industry, private managers are also adapting. Initiatives like the GVCA compact are building regulated Venture Capital/Private Equity (VC/PE) funds and blended-finance instruments that combine local expertise with risk-sharing. ‘You cannot simply pour pension money into risky ventures,’ stressed Afriyie Oware of Axis Pension. ‘The structures must guarantee downside protection while enabling growth.’

Transparency is central. The Teachers’ Provident Fund Scheme (TPFS) and the Ghana Education Service Occupational Pension Scheme (GESOPS), both emphasise governance through independent boards, regular audits, and member updates, giving contributors confidence that their savings are not being misused. International lessons also weigh heavily: in 2023, Ghana restricted offshore investments during cedi volatility, a reminder that macroeconomic stability is as much a safeguard as regulation.

Together, these regulatory checks, industry innovations, union pressure, and contributor-level oversight amount to a layered defence. The promise is that Ghana can unlock growth capital while keeping workers’ retirement secure but only if governance remains transparent and enforcement stays uncompromising.

Recent Developments

‘Pensions are workers’ money and must be invested with utmost care, backed by proper studies and credible governance,’ warned Kwesi Adu-Amankwah, General Secretary of the International Trade Union Confederation Africa, on 11 September 2025. His warning sharpened the debate, reinforcing demands from unions such as CLOGSAG and the PSWU for actuarial studies, tested pilot schemes, and binding legal safeguards before channeling retirement funds into high-risk ventures. 

 Industry players are pushing for diversification, though with different emphasis. Afriyie Oware has repeatedly insisted on tighter risk controls, while the Ghana venture capital association highlights the need for regulated VC/PE vehicles to channel pension capital safely. President John Mahama has since announced a national pensions review, pledging consultations with labour and industry. The debate now sits at the crossroads, with policymakers under pressure to prove that safeguards are more than promises before trust in the reform erodes.

Ghana in the African Picture

Ghana’s plan to channel 5% of pension assets into start-ups and SMEs is one of the boldest moves on the continent. In comparison, Nigeria limits alternative investments to infrastructure bonds and carefully regulated funds, while Kenya and South Africa have made smaller, cautious forays into private equity and venture capital. By explicitly mandating this allocation, Ghana positions itself as a potential precedent for African pension reform, a test case for turning retirement savings into growth capital.

International agencies, including the World Bank and Organisation for Economic Co-operation and Development (OECD), caution that such ambitious allocations succeed only when paired with strong governance, transparency, and credible exit strategies. That balance between pioneering ambition and careful oversight makes Ghana’s reform a closely watched experiment across Africa, a bold move offering both inspiration and a warning if safeguards falter.

Lessons from Africa: What Ghana Can Learn.

Across the continent, pension funds are being tapped for development capital, offering instructive lessons for Ghana. In Kenya, the National Social Security Fund has selectively invested in infrastructure projects, demonstrating how controlled exposure can generate returns without jeopardizing contributors’ savings according to Capital FM Kenya, (2024). Nigeria has piloted private-equity channels for SMEs, highlighting the importance of robust regulatory frameworks and risk monitoring to protect contributors, reported Business Day Nigeria, (2023).

South Africa has encouraged pension fund participation in venture capital, but lessons from past volatility stress the need for strict governance and phased rollouts, according to OECD Pension Review (2022).

Ghana can draw key takeaways: ensure transparent governance, implement pilot schemes before full-scale allocations, maintain independent oversight, and develop risk-sharing structures to safeguard workers’ savings. By learning from these regional experiences, Ghana’s 5% VC/PE allocation can be both innovative and prudent, setting a precedent for African pension-driven entrepreneurship.

Balance of Promise & Peril

Ghana’s pension reform represents a bold experiment in using domestic retirement savings to fuel entrepreneurship and economic growth. If executed well, it could unlock jobs, stimulate SMEs, and set a continental example for harnessing pension funds as development capital.

Yet the path forward is fraught with challenges. Success depends on maintaining public trust through transparent reporting, credible pilot outcomes, and enforceable governance. Market readiness, macroeconomic stability, and political continuity are equally crucial. Union leaders, fund managers, and regulators all play a role in ensuring that ambition does not outpace capacity.

The reform’s promise is real, but so is the peril: missteps could erode confidence and stall the initiative. Ghana’s experience will not only shape domestic outcomes but also influence how other African countries approach pension-led development. The stakes are high, but with careful execution, the rewards could be transformative.

How Ghana’s Pension Experiment Will Be Judged.

Ghana’s pension reform is a gamble between ambition and trust. If governance holds, with transparent audits, independent oversight, and carefully tested pilot schemes the country could show how retirement savings can fuel national growth without undermining security. If it falters, the damage will not only be financial but a collapse of faith in the very system meant to protect workers’ futures. For entrepreneurs like Adutwumwaa and riders like Lawrence, the policy could unlock livelihoods and innovation. For unions and pensioners, the proof must come in safeguards, not promises. The coming months will determine whether Ghana emerges as a continental model for pension-driven development or serves as a cautionary tale about blending retirement security with high-risk ventures.