Pension funds must be divested beyond Ghana — Ecobank CIO
CHIEF Investment Officer for Wealth and Asset Management at Ecobank, Emmanuel Owusu, has called for room to enable pension fund managers to diversify their investment portfolios beyond the shores of the country.
Consequently, he advocated a regulatory shift to allow pension fund managers to explore opportunities in international markets, arguing that diversification was crucial for long-term growth.
He was speaking at the 3rd Annual Forecast Dinner and Charter Recognition Ceremony organised by CFA Society Ghana, which brought together financial experts, policymakers and investment professionals to discuss Ghana’s economic outlook and the future of investment strategies.
With global markets offering a wider range of high-yield investment instruments, Mr Owusu’s recommendation aligns with calls from various stakeholders who believe that a more flexible investment framework could enhance returns and reduce risks associated with overexposure to local economic conditions.
“We strongly encourage the National Pensions Regulatory Authority ( NPRA) to permit pension fund managers to allocate a portion of their investments externally, with a minimum threshold of at least 5%. By diversifying a bit more into external markets, pension funds can seize additional investment opportunities available beyond local boundaries,” he said.
The call comes at a time when avenues for investments in the country continue to shrink.
It is also on the back of the lack of trust of the people whose confidence has been severely bruised by the recent haircut many investments suffered on the back of the
Domestic Debt Exchange Programme gruelly undertaken by the previous government.
What was considered risk-free investments because they belonged to government became easy targets with government dictating the quantum of haircut against the wishes of the investors.
AI and strategic Investment
Mr Owusu urged Ghanaian investors to embrace Artificial Intelligence (AI) driven decision-making to remain competitive in the evolving global financial landscape.
The growing influence of AI in finance is evident worldwide, with algorithms and machine learning models driving portfolio management, risk assessment and market analysis.
In Ghana, the integration of AI in the investment space remains in its early stages, but Mr Owusu believes that laying the right foundation now will ensure long-term success.
He also highlighted the need for strong policies that will facilitate AI adoption, particularly in terms of data infrastructure.
As Ghana moves towards becoming a more tech-driven economy, AI is expected to play a pivotal role in financial services, enabling investors to make more informed and efficient decisions.
“We urge Ghanaians to prioritise strategic investments this year, with artificial intelligence (AI) playing a key role in investment decisions. Ghana is actively positioning itself within the AI landscape, and we must collectively acknowledge that we are in the foundational phase of AI transformation.
To ensure inclusive growth, it is essential to advocate data centre policies that support AI development. Additionally, investors should not limit themselves to Ghana alone but should also explore opportunities in other markets,” he said.
Gold coin
Addressing another key development in Ghana’s financial sector, Mr Owusu praised the Bank of Ghana’s introduction of a gold coin, calling it a positive step towards expanding investment opportunities. The gold coin is expected to serve as a stable investment vehicle and an alternative asset class for both local and foreign investors.
The gold coin initiative is part of the central bank’s broader strategy to strengthen Ghana’s financial market by leveraging the country’s natural resources.
Gold has historically been a safe-haven asset, particularly during economic uncertainties, and introducing a standardised investment-grade gold coin could attract significant interest from institutional and individual investors alike.
“The Bank of Ghana’s introduction of a gold coin is a positive initiative that will provide investors with a new investment avenue. Ensuring transparency in pricing is crucial.
Additionally, the involvement of external investors will enhance credibility and help establish a robust market for the gold coin,” he said.