US$35,5m NSSA funds stuck in failed banks

Source: US$35,5m NSSA funds stuck in failed banks | The Financial Gazette March 2, 2017

INVESTMENTS by the National Social Security Authority (NSSA) amounting to US$35,5 million as at December 31, 2016, remain stuck in failed financial institutions.
While NSSA is not the only institution whose funds remain trapped in collapsed banks, the authority has been under the spotlight for risking contributions pooled by the working masses so they could access them upon retirement.
At the moment, NSSA is paying pensioners a paltry US$60 per month, which government said should be raised to US$100 in the first quarter of the year and gradually raise this to US$150 by the end of the first half of the year.
Last year, NSSA had to part ways with its top executives, some of whom have since been arraigned before the courts facing charges of criminal dereliction of duty.
Among the lobby groups that have been critical of NSSA is the Zimbabwe Congress of Trade Unions (ZCTU) which, right from the outset, had serious reservations over its formation way back in 1998.
Last month, Japhet Moyo, ZCTU’s secretary-general, wrote to NSSA, requesting the authority to provide them with information on those whom it had extended loans to; the levels of security tendered and what levels of risks it is exposed to on such loans and investments.
“We note that over the years, NSSA has been playing a critical role in mobilising savings not only for payment of social security, but also for the economic development of Zimbabwe. In fact, NSSA has taken a bigger strategic slant towards infrastructural investment,” wrote Moyo.
“It has heavily invested in real estate and banks. Today, NSSA is arguably playing the role of a development bank more than social security institution. In the process, however, some of the investments have been nugatory, resulting in reports of losses of millions of workers and employers’ money.”
Moyo concludes his letter by requesting NSSA to provide the requested information as soon as possible.
He wrote: “As you might be aware, workers have been skeptical of NSSA and its investments and such information will help the ZCTU in explaining these issues to them.”
NSSA general manager/chief executive officer, Liz Chitiga, responded by revealing that US$35,5 million was stuck in various financial institutions that had gone bust.
“We note your concerns regarding funds that are held in failed institutions and assure you that my team and I continue to explore ways to recover as much of these funds as possible,” said Chitiga.
“As at December 31, 2016, the total figure of funds stuck in such financial institutions was about US$35,5 million”.
Moyo had claimed in his letter to NSSA that the authority had lost much more than the US$35,5 million, averring that it had lost US$50 million in Renaissance Bank, US$25 million in Interfin Bank, US$1 million in Genesis Bank and US$16 million in other collapsed banks.