Ghana State Pension Fund Taps Growing Middle Class With M

Ghana’s state pension fund, which has 3.6 billion cedis ($1.9 billion) in assets, is boosting investments in shopping malls in the West African nation, where oil-led growth is outpacing the regional average.

Social Security and National Insurance Trust, which holds stakes in residential real estate and office buildings, sees retail as the country’s next growth area as a middle class emerges, Jerome Eshun, general manager for investment and development, said in an interview in Accra, the capital, on March 18.

“As the economy expands, the middle class population is expected to increase,” he said. “Demand for one-stop shopping centers to buy dresses, food, among other households items is going to rise.”

Ghana’s $35 billion economy, the second-biggest in West Africa, is forecast to grow 8 percent this year from a provisional 7.1 percent in 2012, according to the Finance Ministry. That’s faster than the International Monetary Fund’s projection of about 5.8 percent for sub-Saharan Africa and a sixth straight year of Ghana’s growth rate beating the region.

The world’s second-biggest cocoa producer, which started oil exports in December 2010, became a lower middle-income country after changing the way it measures gross domestic production in 2009. The population grew 28 percent over 10 years to 24.2 million in 2010, according to the statistics agency’s census that year. The number of people living in the Greater Accra region jumped 38 percent.

Population Demand

The pension fund will own 40 percent of West Hills Mall, the biggest shopping center to be developed in the city, according to Pretoria-based Atterbury Property Developments, which will own the remainder. It is the fund’s second investment in a retail site, according to Eshun. It owns 90 percent of the Makola Shopping Mall, in the city’s central market, he said.

Construction of the $96 million West Hills Mall has started and the site will open in October 2014, according to a March 13 statement from Atterbury, which last year along with Sanlam Ltd. bought an 85 percent stake in the Accra Mall, northeast of the city center.

West Hills will be located about 30 kilometers (19 miles) from the Accra Mall, and will house some of the same tenants, including South African retailers Shoprite Holdings Ltd. (SHP) and Mr Price Group Ltd. (MPC)

The development will “make it easier for people in the other side of Accra to go and shop,” Eshun said. “Accra Mall alone cannot meet the demand from the population.”

Non-food inflation, which measures consumers goods including clothing, furniture and shoes, accelerated to an annual 12.6 percent in February from 11.5 percent a month earlier, the country’s statistics agency said on March 13. The overall rate rose to the highest in more than 2 1/2 years to 10 percent in February from 8.8 percent a month earlier.

To contact the reporter on this story: Moses Mozart Dzawu in Accra at mdzawu@bloomberg.net

To contact the editor responsible for this story: Emily Bowers at ebowers1@bloomberg.net

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