The country’s current economic woes is driving investors to seek diversification away from government securities, and Pension funds are setting their sights on investing in the real sector, this is according to the 2023 outlook survey by Axis Pension Trust.
According to the survey, investors are now looking to diversify their portfolios in alternative assets, which will set the stage for pension funds to finally invest in the real sector of the economy.
This is seen as a positive step towards addressing the structural weaknesses in the Ghanaian economy.
Market analysts are of the view that investors could consider real estate investments and exposure to agriculture and energy-focused private equity (PE) funds as alternative investments.
Alternatively, commodities such as gold and other precious metals, infrastructure and cryptocurrencies could be considered as well.
The Chief Executive Officer of Axis Pension Trust, Mr. Afriyie Oware observes that developed countries allocate a significant percentage of pension fund assets to the private sector to drive economic growth.
“It is necessary to redefine the direction of the country for the next economic cycle by efficiently allocating resources to the private sector and implementing proper investment guidelines. This will attract private sector investments, drive economic growth, and avoid excessive investing in government debt,” he added.
However, Mr. Oware was quick to add that effectively harnessing these opportunities will require changes to the existing investment guidelines from the Securities and Exchange Commission (SEC), and the National Pensions Regulation Authority.
The changes to the existing investment guidelines will be to increase the investment ceilings on other asset classes as the current ceiling assigns heavyweights to the sovereign debt.
The survey further established that the domestic debt exchange programme could be disruptive to both the financial and real sectors for years to come.
The growth outlook and its consequential impact on asset prices are highly negative, with the central bank losing credibility in its ability to control inflation and liquidity being drained out of the system.
“With the central bank losing credibility in its ability to control inflation and with liquidity being drained out of the system, the growth outlook and its consequential impact on asset prices is highly negative,” the outlook stated in part.
Government will have to think of bolder and more transformative policies to build fiscal buffers towards a path of sustainability.
