The Chief Executive Officer of Axis Pension Trust, Afriyie Oware, has proposed policy interventions, including government-backed incentives and matching contribution schemes, to increase pension participation among workers in Ghana’s informal sector.
According to him, current market conditions make it financially unattractive for pension providers to aggressively target the informal sector due to the high costs associated with customer acquisition and long-term sustainability.
Speaking on the sidelines of the 2026 Axis Pension Trust Pension Strategy Conference, Oware explained that pension institutions face significantly higher operational costs when enrolling informal sector workers compared to workers in the formal sector.
He stated that internal assessments by Axis Pension Trust indicate that the cost of acquiring an informal sector client is approximately five times higher than that of a formal sector client.
He further explained that while pension providers may recover costs within roughly four years for formal sector clients, it could take up to eight years to break even on informal sector clients, making the segment less commercially attractive for industry players.
To address these challenges, Oware proposed government intervention through annual grants or incentives to encourage pension providers to expand their focus on informal sector workers.
He also advocated for the introduction of matching contribution arrangements to encourage participation and make pension schemes more appealing.
According to him, workers in the formal sector already benefit from employer contributions, which often account for a significant portion of retirement savings, while informal sector workers do not have access to similar support mechanisms.
Under a proposed model, he suggested that the government could provide seed contributions for informal sector participants as a way of driving enrolment and encouraging consistent contributions.
As an example, he proposed a system where the government could provide an annual contribution of GHȼ100 for every informal sector worker enrolled, while participants would be required to contribute a multiple of that amount.
Oware noted that similar incentive-driven pension programmes have delivered positive outcomes in other countries and urged policymakers to consider adapting successful international models.
He pointed to Rwanda as an example of a country where targeted incentive-based pension initiatives for informal sector workers have produced encouraging results.
