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Opinions Sun, 25 Jan 2004

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Attracting retirement incomes for investment

Chiefs and politicians in Ghana have been calling on Ghanaians resident overseas to invest in the country but there is a source of possible investment income that is not being targeted. This is retirement incomes. Though people are living longer, people in the developed world tend to retire earlier. In Australia, the retirement age is 65 but many people are retiring before they turn 55 in some cases a month or days before that magical age. There are many people who have migrated to the countries they currently live in from their country of birth. Some of these are approaching retirement within the next decade or have retired. When they retire many of these people will move to a new house, a new country, a new city or new state/province. Many of the immigrants contemplating retirement are thinking of making that migration back to places filled with memories, family connections and places they spent their formative years ie their places of birth. The result is that there is increasing interest in the motherland by these immigrants wherever that motherland might be. Where they choose to retire is important and many states and countries are hoping to influence this decision. For example, though Australia’s immigration policy is geared towards attracting younger and skilled people it has recently introduced a retirement visa program aimed at attracting retirees with assets and wealth. Other countries have such programs and soon there will be competition among nations to attract some of this wealth just as there is competition to attract the young and skilled.

The retiree group is also attracting attention because they represent a fast growing segment of most populations and are known to have more expendable income. The benefits of having the retiree groups to settle in an area are many.

In relative terms, retirees contribute more than they cost. Retirees who choose to sell their homes and relocate tend to be relatively wealthy, healthy and better educated. Retirement income can lead to job growth. Retirees spend their income in the area they live creating a demand for goods and services. Retirement income benefits local economies by increasing the demand for local goods and services, creating a source of investment funds, and generating a deposit base for financing community development projects. The retirees are less likely to put pressure on the school system, as they are not likely to have school age children. They do not normally commit crimes and are not likely to participate in riotous behaviour.

As a result of understanding the net benefits of the retirement industry, more towns, counties, and states in the US and states and towns in Australia are beginning to recruit retirees. The recruitment drive has resulted in many retirement communities springing up in various areas in the US and Australia particularly away from major urban centers. Some governmental units are getting involved with project financing and efforts to develop retirement housing that will attract retirees and create jobs. Many local communities in Australia, US and Canada are benefiting from the wave of income from the retirees that has resulted in the rejuvenation of some areas that were experiencing low populations. This relatively healthy and wealthy group represent a huge economic source and it is important for Ghana to start looking at this as a possible source of investment capital. Government may need to consider providing some incentives for many of its citizens abroad who are in the “baby boomer” category to resettle in ogyakrom. Imagine the boost to the economy if 200 of these retirees with a net worth of 100,000 dollars return to Ghana. In addition to this, they will create demand for services, bring in skills that are transferable and provide some expertise to meet some skills shortages for most of these people are educated public servants and professionals with many years of experience. Most of these would be volunteers providing their services for free or minimal payment.

It must be noted, however, that ageing presents its own health challenges. With ageing comes increased cost for housing and medical services but the available research suggests that the advantages of getting retirees to live in a particular area far outweigh the disadvantages. If these people were to live in urban centers then there would also be social and infrastructural problems. The ideal is to get these communities established outside major centers and to have required facilities in the vicinity.

Many Ghanaians overseas when asked about retirement plans say they would like to retire in Ghana. They point to the relatively lower cost of living in Ghana. Most are also worried about the type of services they would receive should they end up in a nursing home or a retirement village overseas. They have also expressed concern with the societal challenges related to quality of life in old age that they will face in what they still see as a “foreign” country despite the fact that some have lived there for over twenty-five years and their adult children don’t even know where Ghana is. They also believe that the discrimination that they perceive as existing now will be compounded because of the differing social and cultural attitudes to older people. Ghana is also seen as a relatively relaxed and peaceful country. There is the family support that will be available in Ghana, which may not be available where they live. However, the majority would only consider retirement in Ghana if they can be assured of certain facilities. The main concern is health facilities for as alluded to ageing presents its own health challenges.

There is a potential pool of Ghanaians who will have access to retirement funds in the next few years who will be able to resettle in Ghana. The many building projects undertaken in Ghana by Ghanaians resident overseas is, in my view, part of the retirement planning of individual Ghanaians and the government and the private sector could work together with the various Ghanaian Associations in Europe, Canada, Australia and the US to tap into this potential source of investment income. The Ghana government is making interesting waves about promoting tourism as it sees it as part of its economic development strategies. I am not sure how many of the leading exponents of the tourism drive realise that, that the tourism strategy must have a component aimed at attracting retirees. There are many Ghanaians overseas whose last visit to Ghana was more than ten years ago and such people are not going to be attracted as retirees unless we are first able to attract them as visitors.

To be successful in attracting retirees, a marketing plan is necessary. Priorities must be established, audiences targeted, and a marketing strategy developed. The various Ghanaian missions overseas can be part of this drive. In built in this are some incentives. These could include ensuring that land could be acquired unencumbered and free of litigation. I know of a number of people who have lost huge sums of money on land acquisition as land is sold to more than one person at the same time, something that is not likely to happen in the West.

There are also a number of things that have to improve. Economic development cannot take place without adequate water supplies and sanitation facilities. The transportation system within the country needs to improve. Energy resources, particularly electricity, must be available and affordable. Telecommunications networks are particularly important at this time, because of the on-going global revolution in information technology.

Roads, electricity and telecommunication need developmental capital. However, there is one area that might help attract people into the country whether for permanent settlement or for tourism that does not require a huge injection of capital. This is the area of customer service. We have the human resource what is needed is attitudinal change. Poor customer service and the lack of respect for rules, regulations and law and order are areas of great concern to many visitors to Ghana. People who have lived overseas for many years will expect not to beg/bribe anyone for a legitimate service.

“The high incidence of corruption in high and low places, fanned in a lot of cases by bureaucratic red tape and avarice, is a major impediment to investment promotion. Furthermore, given our coup prone history and the untold hardships that have been inflicted on numerous Ghanaians by means of such dastardly acts, potential Ghanaian retirees may be unsure of the long term viability and sustainability of our current democratic dispensation, their own safety and the security of their hard earned assets invested in Ghana. The Government and for that matter Ghanaians need to work harder so as to be able to address these concerns and establish the rule of law (not the rule of a few unelected people who govern Ghana only for the welfare of themselves, their families and their cronies) in all facets of Ghanaian life. Ultimately, the viability of our nascent democracy would depend on the ability and willingness of our governments to significantly and dramatically lift the standard of living and welfare of all Ghanaians and the application of the rule of law in an open and transparent manner to all Ghanaians without fear or favour – governments ruling for all and not for a select few”(source: Augustus Agyemang, Canberra).

Private enterprise in conjunction with Government could build retirement villages in areas outside urban centres eg Ahwerease on the Accra - Akropong Road. The weather is good, close to a tourist centre and not far from Accra. These villages should have medical facilities (clinics which could be set up and manned by retired medical professionals who have returned home after living overseas) in the area or close by, good access roads with a mini mart. The developments at Pokuase is an example but the house type should be single level for as people get older they are unable to use stairs. We need to start seriously thinking about the ageing population and their needs. We must not only work harder we must work smarter.


Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.
Columnist: Banful, Ebenezer

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