African Pension Funds shift more capital into private equity

African pension funds are increasingly shifting capital into private equity, according to recent developments in West Africa. Ghana has emerged as a prominent example, showcasing how domestic pension savings can be invested in diverse assets like private equity, venture capital, and SME growth financing. Initiatives such as the GVCA's 5% Pension and Insurance Industry Compact and Impact Investing Ghana's Pension Industry Collaborative have been instrumental in this shift.

In April 2025, Ghana launched the GVCA's 5% Pension and Insurance Industry Compact, aimed at diversifying pension investments. The $70 million SME Fund of Funds, managed by Savannah Impact Advisory and Ci Gaba, invests in private equity and venture funds, targeting small, growing businesses across West Africa.

The 7th Africa Pension Supervisors Association (APSA) Conference, held in Accra last month, brought together pension regulators, policymakers, industry leaders, and development partners to discuss the future of pension systems on the continent. The event highlighted the need for more inclusive and resilient pension systems capable of supporting Africa's ageing population and expanding retirement protection to informal sector workers.

Ghana's pension investment guidelines permit up to 25% of pension assets to be invested in alternative instruments, providing a conducive environment for institutional participation in private capital. This regulatory framework has facilitated the growth of pension-backed private equity and SME funds, with Ghanaian pension trustees and schemes participating in funds such as the Injaro Ghana Venture Capital Fund and the Mirepa Capital SME Fund I.

Ghana's progress began with the establishment of the National Pensions Regulatory Authority in 2008 and has since expanded alternative investment limits in 2021, creating a pipeline of pension-backed private equity and SME funds. The Growth Firms Alliance (GFA) mapping identifies Ghana, Rwanda, Uganda, Nigeria, and South Africa as jurisdictions with publicly disclosed pension-backed commitments into private capital vehicles.

The shift towards private equity and other alternative assets offers significant benefits, particularly in addressing the dependence on foreign currency funding in African private capital markets. By financing local enterprises in cedis, Ghana is helping to mitigate exchange-rate risk and contributing to economic transformation and job creation. The involvement of female fund managers and advisors, such as Hamdiya Ismaila and Amma Gyampo, further underscores the positive impact of this shift on the ecosystem.