Patient Capital: AGI leadership to lobby for more pension funds into private sector
Leadership of the Association of Ghana Industries (AGI) has revealed plans to engage government to increase the threshold of pension funds pumped into the private sector as patient, long term capital for businesses.
Speaking to norvanreports in an interview, President of the AGI, Dr Humphrey Ayim-Darke, averred the private sector needs more of patient and long term capital like pension funds to grow and expand production.
Currently, pension funds channelled into the private sector by the various Trustees of the Tier two and Tier three pension schemes, is a meagre 5%.
Dr Ayim-Darke, however hopes that, with the Association’s plan to engage the government in the coming months, it will be able to convince the government to increase the percentage of pension funds it channels into the private sector from the current 5% to an appreciable level.
“Government has been very careful on how much of pension funds to go into high risks sectors, and in the private sector, as much as there is high risk, there is also high returns.
“However, most of the pension firms prefer safe investments like going into government instruments. But, the sort of funding we need to expand the private sector and manufacturing, is a bit of pension funds,” he stated.
“Our prayer is that that, the percentage which the law grants Trustees of the Tier two and Tier three pension funds to invest in industry, is increased. And that, flexibility to take little higher risks into the private sector is encouraged by government.
“So this is the advocacy we seek to engage government on, once it perfects its books in these difficult times, to allow pension funds Trustees get involved more in the industry, so we can get more pension funds coming to private businesses,” he added.
Meanwhile,
he DBG together with the Ghana Stock Exchange (GSE) and the Association of Ghana Industries (AGI) have signed a tripartite Memorandum of Understanding (MoU) to support SMEs in the country.
The tripartite agreement was signed between the three institutions during a capacity building workshop held for members of the AGI.
The agreement forms part of DBG’s mandate of building capacity and empowering banks and entrepreneurs through financial innovation and other advisory services to strengthen the ecosystem in which businesses operate.
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Speaking at the signing of the tripartite agreement, Deputy CEO of DBG, Michael Mensah-Baah stated that, “The DBG’s primary objective is to ensure that SMEs are in a better position to receive and use funds from participating financial institutions (PFIs).
“A critical role of DBG, therefore, is to provide long-term funding to banks to engage in partnerships with institutions like AGI and GSE to ensure the empowerment of the private sector for growth.”
Also speaking at the event, was Deputy Managing Director of the GSE, Ms Abena Amoah who averred the GSE, DBG and AGI share the same ambition of supporting Ghanaian SMEs to become giants in their industries by making patient capital available to them to expand their businesses.
“This tripartite MoU represents a significant step in catalyzing the growth of our SMEs by providing access to much-needed capital.
“The Ghana Alternative Market was specifically set up by the GSE to support SMEs to build sustainable businesses. The GSE is committed to all the action plans outlined in the MoU,” she added.
