NPRA sets ambitious target of 25% pension penetration in informal sector by 2026
In a bold move to enhance pension coverage among informal sector workers, the National Pensions Regulatory Authority (NPRA) has embarked on an ambitious initiative. The regulatory body aims to increase pension penetration from a mere 6 percent to an impressive 25 percent by the year 2026. The Chief Executive Officer of the NPRA, Hayford Attah Krufi, emphasized the Authority’s unwavering commitment to achieving this target, despite the prevailing misconceptions about pensions within the informal sector.
Mr. Krufi made these remarks at a brief ceremony held to mark the conclusion of the successful SECO project, during which he shed light on the notable progress already achieved. “Until just two years ago, a paltry 1 percent of Ghanaians in the informal sector had registered for a pension scheme. Today, we have managed to raise that figure to 6 percent,” he revealed. While the pace of progress may be gradual, it is steady, and the NPRA’s strategic plan sets forth an ambitious target of 25 percent penetration by 2026.
The primary obstacle the NPRA faces in its mission to expand pension coverage is the persistent misconception that pensions are exclusive to the formal sector. Mr. Krufi urged individuals to discard this mistaken belief, underlining that pensions are equally important for workers in the informal sector. Through a comprehensive sensitization drive, the NPRA aims to dispel myths surrounding pensions and emphasize their benefits to all workers, regardless of their employment status.
In pursuit of its objective, the NPRA has sought to leverage the technical expertise and knowledge offered by the Swiss government. Collaboration with the Swiss Secretariat for Economic Affairs has enabled the NPRA to implement a robust risk-based framework and supervision systems. These measures are designed to tackle challenges such as non-compliance among industry players and ensure the sustainable growth and regulation of Ghana’s burgeoning pension industry.
The SECO project, spanning two phases since its inception in 2014, has played a pivotal role in facilitating the NPRA’s progress. The Swiss government has provided significant financial support, with a total investment of 4.2 million Swiss Francs (equivalent to approximately 50 million Ghana cedis). This substantial funding has enabled the NPRA to establish a solid foundation and lay the groundwork for a more inclusive and efficient pension system.
Ghana’s pension landscape is set to witness a significant transformation as the NPRA relentlessly pursues its mission to expand coverage in the informal sector. By debunking misconceptions and raising awareness about the benefits of pensions, the NPRA aims to empower workers, enhance financial security, and contribute to the overall economic growth of the nation.
As the NPRA forges ahead with its ambitious plans, the financial world will be closely monitoring Ghana’s progress. The impact of increasing pension penetration in the informal sector will have far-reaching implications, creating a more robust and resilient pension system that caters to the diverse needs of all Ghanaians.
