Nssa chaos has to be sorted out

Source: Nssa chaos has to be sorted out – The Zimbabwe Independent March 29, 2018

THE dismissal of National Social Security Authority (Nssa) board chair Robin Vela yesterday by Labour and Social Welfare minister Petronella Kagonye for allegedly not being ordinarily resident in Zimbabwe — a claim which he dismisses emphatically — brought to the fore the problems and chaos at the institution.

Zimind Comment

The action will not resolve whatever crisis Nssa has. Indeed, it will not tackle deep-seated problems at the state-run pension scheme to improve efficiency and profitability. Workers and poor pensioners are usually the biggest losers when such things happen at the institution.

Nssa was created by an Act of Parliament which empowers the Minister of Public Service, Labour and Social Welfare to establish social security schemes for the provision of benefits to all employees.

The scheme is based on the principle of social solidarity and pooling of resources and risks, involving drawing of savings from periods of employment, earnings and good health to provide for the rainy day, that is periods of unemployment, old age, and death. Currently it is administering two schemes: Pension and Other Benefits Scheme and Accident Prevention and Workers’ Compensation Scheme.

Vela says he left Nssa on an impressive growth curve as reflected by the financial surge in surplus of 638% from US$19,5 million in 2015 to US$144,2 million in 2017. Perhaps he has a point, but there is no escaping the fact that the institution has been rotten to core through mismanagement and corruption over the years. He might have tried to sort that out, but allegations of corruption have persisted.

But why was he fired? The trouble is lack of full disclosure and transparency on the issue. We were not told why Vela was dismissed beyond the claim he is not ordinarily resident in Zimbabwe, which he says is false. Government must come out clean on the issue. If he broke the law or was corrupt, authorities must say so. We need a forensic audit. This will give details and context to the matter. Otherwise, this leaves the public with the impression that this is yet another example of political interference and maladministration at the fund.

Nssa —which administers over US$1 billion and widely seen as one of the biggest sources of cheap funds — has been used as a convenient piggybank by government, corporates and politicians. Even its own managers have been part of the looting.

As a result, those who borrow from the institution are not subjected to the same level of scrutiny and risk management procedures as those who borrow from commercial banks. That is why Nssa lost over US$350 million in bad deals in recent years; half its total investment portfolio. This is totally unacceptable.

All this money belonged to pensioners who are languishing in poverty, while their hard-earned money goes to fat cats or down the drain. Retirees are some of the most vulnerable members of Zimbabwean society. That is why the chaos at Nssa has to be sorted out urgently.

The same applies to parastatals and state-owned enterprises destroyed by extended periods of corruption and mismanagement. The economy cannot recover if state-run institutions are still havens of political interference, incompetence and graft.