- Pension Funds Now Central to Monetary Policy and Financial Stability — BoG
Ghana’s rapidly expanding pension industry is becoming a major force in sovereign debt, banking and equity markets, requiring regulators to adopt a wider and more coordinated approach to financial stability, Bank of Ghana Governor Dr Johnson Pandit Asiama has said.
Speaking at the Africa Pension Supervisors Association Annual Conference in Accra, Dr Asiama said pension systems could no longer be treated as peripheral institutions because of their growing asset base, long-term investment horizons and deepening links with the broader financial system.
Pension assets in Ghana increased by 26.30% to GH¢108.88 billion in 2025 from GH¢86.23 billion in 2024, accounting for 16.80% of total financial-sector assets.
Across Africa, pension assets under management now exceed US$420.00 billion.
The figures indicate that pension funds are evolving from custodians of retirement contributions into large institutional investors whose decisions increasingly influence demand for securities, market liquidity, asset prices and investor confidence.
Dr Asiama identified three principal channels through which pensions affect financial stability: macroeconomic conditions, market interconnectedness and operational confidence.
The first is the effect of inflation and interest rates on the purchasing power of retirement savings.
“A pension is a claim on future purchasing power,” he said, arguing that price stability is essential to protecting the real value of workers’ long-term contributions.
Headline inflation in Ghana peaked at 54.10% in December 2022 before declining to 5.30% in June 2026.
The governor said lower inflation was not simply a macroeconomic achievement but a direct contribution to the preservation of retirement income.
Persistent inflation erodes the value of savings and reduces what pensioners can afford in food, healthcare, housing and other essentials.
The second channel relates to the increasing exposure of pension funds to government securities, banks and listed equities.
Private pension assets reached GH¢79.80 billion in 2025. The proportion invested in Government of Ghana securities declined to 64.50% from 72.90%, while allocations to ordinary shares and non-redeemable preference shares rose to 12.20% from 5.70%.
Investments in bank and other market securities increased to 14.00% from 8.60%.
The shift suggests gradual diversification away from sovereign debt, but it also increases the pension industry’s connections with banking and equity markets.
Changes in pension fund investment allocations can affect security prices, yields and liquidity. Developments in interest rates, sovereign risk and financial markets can, in turn, influence pension portfolio performance.
Dr Asiama said these links had implications for central banks because monetary policy increasingly operates through institutional investors as well as commercial banks.
Pension funds influence the yield curve and financial-market liquidity through their demand for government debt, bank instruments and shares.
Their long-term liabilities also allow them to provide patient capital and absorb short-term volatility, provided that liquidity and risk-management systems remain sound.
The third channel is operational resilience and confidence.
Pension systems hold decades of contribution records, account balances and beneficiary information, all of which must remain secure and accessible through technological change, institutional transitions and operational disruptions.
“A promise that cannot be evidenced is not a promise,” Dr Asiama said.
He argued that cybersecurity, business continuity and data integrity should be treated as central elements of pension security rather than administrative concerns.
As pension administration and payments become more digital, system failures and cyber incidents could spread across institutions, even where those organisations have no direct commercial relationship.
Artificial intelligence also creates model, governance and conduct risks, while climate shocks can affect both asset values and workers’ ability to continue making contributions.
The governor called for stronger cooperation among the Bank of Ghana, National Pensions Regulatory Authority, Securities and Exchange Commission, National Insurance Commission, Ministry of Finance and Ghana Deposit Protection Corporation.
These institutions operate through the Financial Stability Council, which provides a platform for sharing information, identifying vulnerabilities and coordinating policy responses.
Dr Asiama said connected financial risks could not be addressed effectively by institutions operating within separate regulatory boundaries.
He also stressed the importance of timely, comparable and granular data.
Fragmented or delayed information could prevent regulators from identifying common exposures before vulnerabilities spread across the financial system.
The governor welcomed the proposed Africa Pension and Asset Management Data Hub as a mechanism for improving market visibility and supporting forward-looking supervision.
The expansion of Ghana’s pension industry represents an opportunity to mobilise long-term capital for infrastructure, enterprises and development.
But its growing scale also means that weak governance, cyber failures or concentrated investment risks could have consequences extending beyond individual pension schemes.
For Dr Asiama, the ultimate test is whether the financial system keeps its promise to workers: that decades from now, their contribution records will remain accurate, their assets will still exist and their savings will retain meaningful value in retirement.
