Ghana’s pension system is covering only a fraction of the workforce it was designed to protect, and the country is sitting on a retirement crisis if it does not act now.
Nearly two decades after the introduction of the three-tier pension system, the coverage gap remains deeply troubling, and the numbers behind it, now laid out in public, make for uncomfortable reading.
President John Dramani Mahama put those numbers on the table on Tuesday at a dialogue with organised labour at the Jubilee House, stating what many have long suspected but few have said at that level.
“Out of an estimated 10 million workers, fewer than 2 million are contributing regularly,” he said.
Pension assets, he added, stood at approximately 100 billion Ghana cedis , around 7 percent of GDP.
“I am afraid to say this is well below continental benchmarks, comparative with other African countries,” President Mahama noted.
The imbalance between those paying in and those drawing out, he warned, was only going to worsen without deliberate intervention.
“If we fail to act, the imbalance between contributors and retirees will continue to deepen, threatening the system’s sustainability and the dignity of our future retirees,” he said.
President Mahama said he had already moved to address the problem, directing the Minister of Finance to lead a structured and far-reaching review.
“I have instructed the Minister of Finance to oversee a thorough review of our pension structure, with the aim of expanding coverage, especially to the informal sector, modernising our contribution systems, and strengthening governance and investment management,” he said.
The informal sector, which accounts for the bulk of Ghana’s working population and remains largely outside the pension net, sits at the heart of the coverage problem the review is expected to tackle.
President Mahama said the end goal of the exercise was not technical but human. “Our goal is clear, every Ghanaian worker must retire with dignity, with security, and with confidence in the pension system,” he said.
Richard Aniagyei, ISD
