Ghana's new securities levies could significantly reduce the long-term returns earned by pension funds and other institutional investors. Dr. Arko Akoto Ampaw, Director of the Ghana Medical Association Fund, states that fund managers will likely pass these higher regulatory costs onto their clients. This means the economic burden will ultimately fall on the beneficiaries of these funds.
The critical issue is not who legally pays the levy, but where the cost settles after asset managers adjust their pricing. Dr. Ampaw explained that fund managers, facing increased regulatory charges, will have less room to negotiate lower fees. This directly impacts the net returns that pension fund beneficiaries receive over many years. The new charges could weaken the bargaining power of large pension funds.
This development fits into Ghana's broader economic story concerning investor protection and market regulation. The Securities and Exchange Commission (SEC) aims to ensure a stable and fair capital market. However, increased regulatory costs can sometimes have unintended consequences for long-term savings. Ghana's pension sector manages substantial assets, making any impact on returns a significant national concern. The debate highlights the balance between regulation and market efficiency.
“We can see that it is us who are going to bear that cost because the players in the market are going to charge them on to us,” Dr. Ampaw stated. He made these comments during a NorvanReports Economic Governance Platform discussion on Sunday, August 16, 2026. The discussion focused on whether the SEC's new levies are regulating or overcharging the market. Dr. Ampaw emphasized that the ultimate concern is the net return to beneficiaries.
The implications are substantial for Ghana's pension landscape and individual savers. Lower net returns mean less money for retirees, potentially affecting their financial security. Decision-makers will need to monitor the impact of these levies on investment growth and market participation. The capital market's attractiveness could also be affected if costs become too high. This situation demands careful consideration of regulatory costs versus benefits.
Fund managers may absorb some costs initially through lower profit margins. However, sustained increases in regulatory charges often lead to higher management fees. This directly reduces the final amount an investor receives from their pension. The difference between a fund's gross return and its net return is crucial for pension beneficiaries. Gross return is what the investment earns before costs, while net return is what the investor actually keeps.
Dr. Ampaw highlighted that even an attractive headline performance of 8% or 10% gross return can be misleading. Fund managers must deduct management fees, regulatory charges, and transaction costs from this gross figure. Only after these deductions is the true net return for the beneficiary determined. This distinction is vital for understanding the real impact of the new SEC levy.
Large pension funds typically have some power to negotiate lower management fees due to their size. However, a significant increase in regulatory payments, such as a 400% increment, reduces this leverage. Fund managers will be less willing to lower their fees if their own costs have risen sharply. This means pension funds may face higher management fees than before.
The concern becomes even more serious in an environment where investment returns are generally low. Fixed or recurring charges, like regulatory levies, consume a larger portion of investment income when gross returns are small. Dr. Ampaw warned about this asymmetry, where charges remain constant but portfolio returns can fluctuate greatly. This situation poses a significant risk to pension fund performance.
An asset-under-management levy, for example, links the charge to the value of assets held, not the income generated. This means regulatory costs can still apply even if a portfolio yields little or no return. Dr. Ampaw cited a hypothetical scenario where a fund manager returns nothing, but still pays 0.225% of the fund's value in charges. This directly erodes the capital of the pension fund, which is a major worry for beneficiaries.
The long-term financial health of Ghanaian retirees depends on robust net returns from their pension investments. Any policy that consistently reduces these returns warrants close scrutiny and public debate. The SEC's role is to protect investors, but the method of funding this protection must not undermine the very savings it aims to safeguard. This issue will continue to be a key point of discussion for financial regulators and market participants in Ghana.