Ghana’s economy will experience a sudden transformation if pragmatic steps are taken to utilize pension funds.
The Chief Executive Officer of Dusk Capital, Bernard Osei-Tutu Jnr believes the West African nation can emulate many European countries whose economic development depended on pension funds.
The nation for over six year has locked up public sector pension funds; a development which has been blamed for slow growth of some investment portfolios.
Since the implementation of the NPRA’s law in 2010, employers are to transfer the 5% 2nd-Tier pension contributions into the Temporary Pension Fund Account (TPFA) to be released subsequently after all data have been reconciled.
The transfer for the previous month is to be paid within 14 days of the following month. Currently, it is unclear how much has been accrued. But in 2014, the Chief Executive of the NPRA, said the amount accrued since the coming into effect of the new pensions law in 2010 is estimated at over GH¢1.6bn.
The breakdown of the GH¢1.6bn is as follows: GH¢522m being contributions from private sector workers, originally paid to the Social Security and National Insurance Trust (SSNIT) and later transferred to the Bank of Ghana (BoG), GH¢490m being public sector workers’ contributions paid to the Controller and Accountant General’s Department (CAGD) and then transferred to the BoG, and investment income of GH¢600m from the two sources.
Mr. Osei-Tutu Jnr says the new NPP administration will do a lot of good to the economy if it makes the funds available to investment firms but maintains a strict monitoring regime on returns.
“We are praying that with the new government, the direction will be that let’s use pensions to develop our economy; ie the infrastructure, the roads, the schools that we are talking about; let’s give the private sector the opportunity.
“For me as a fund manager, I’m looking for an avenue where government can say that; Dusk Capital as a fund manager we are giving you the free hand to invest into real estate. It will push a lot of us to develop programs that will bring a lot of returns on the monies we are to manage,” he said.
The Dusk Capital Limited CEO spoke to Starr Business at the sidelines of a ceremony to mark the signing of a partnership agreement with International Investment Management Group Africa.
The agreement will give the company access to over 300 international mutual funds from other leading institutions like JP Morgan, HSBC and Goldman Sachs.
