Africa holds over US$700 billion in domestic pension, insurance, and long-term savings, yet much of this capital remains invested in low-yield government instruments or flows offshore instead of fueling African enterprises, job creation, and innovation. The challenge is not a shortage of funds but the lack of investable pathways that connect domestic savings to productive investment. Fund domiciliation—the process of determining where a fund is legally registered and governed—is central to this issue, as it shapes financial sovereignty, governance, tax collection, and the local ecosystem of advisory and management services. When African-focused funds are domiciled offshore, control, value creation, and oversight migrate elsewhere, limiting the ability to channel capital effectively toward domestic development priorities.
Ghana is emerging as a pivotal example of how fund domiciliation can transform African finance. With political stability, a growing private capital ecosystem, and pension reforms underway, Ghana is questioning why locally managed funds must register abroad to invest in domestic businesses. Current reliance on company-based structures, such as limited liability companies, creates legal ambiguity, higher transaction costs, and less investor confidence. By adopting limited partnerships, the global standard for private equity, venture capital, and infrastructure investment, Ghana can offer clearer fiduciary duties, liability protections, and contractual flexibility, while embedding strong local regulatory oversight.
Locally domiciled funds are better positioned to support women- and youth-led micro, small, and medium enterprises (MSMEs), which often struggle to access patient capital from traditional banks. Combined with blended finance instruments, guarantees, and technical assistance from development finance institutions, these funds can mobilize domestic savings safely into underserved sectors. Pension funds, with their long-term liabilities, can act as engines of development, allocating even 5–10 percent of assets under management to well-structured local private capital, creating jobs, scaling businesses, and strengthening value chains while reinforcing the sustainability of the pension system.
Ghana’s efforts are being closely watched as a potential model for the continent. Success could redefine how Africa finances its own future, mobilizing domestic savings to drive growth, industrialization, inclusion, and climate resilience. Conversely, weak design, poor enforcement, or early fund failures could entrench skepticism about onshore domiciliation and prolong dependence on offshore structures. Ghana has the capital, the leadership, and the opportunity to demonstrate that Africa can finance its own development on its own terms.
