NSSA Loses $100 Million to Bankrupt Banks, Companies

Now Daily


The government has lost a whopping $87 million through investments in banks and companies that hit the wall, officials confirmed.

The revelation has attracted public outrage as most of the failed banks and companies were owned by individuals aligned to government or ruling Zanu PF party officials.

“A total of US$52 million was lost in a number of failed local banks whilst more than US$35 million was lost in closed companies,” said public service, labour and social welfare minister Prisca Mupfumira. “My ministry has asked the NSSA board to undertake detailed investigation into some of the property acquisitions and construction projects. We will present the reports to the House of Assembly once they are completed.”

Mupfumira acknowledged that NSSA expenses over the years have been deemed by contributors and the public to be too high. In 2015, she said, a total of US$22 million was spent on staff costs, US$1.2 million on ICT expenses with other costs accounting for US$24 million.

“The total costs of US$47.3 million are too high for a fund generating a total investment income of US$23.5 million on a balance sheet of US$1.3 billion as at December 2014. The low return on investment and poor operating expenses coverable ratio is an area the board is focusing on. A fund of NSSA’s size should pay its costs from investment income and not to use contribution premiums to pay salaries. The board has been directed by my Ministry to ensure that this aspect of NSSA’s operations is immediately addressed. Management of NSSA has to ensure that their remuneration comes from investment income and all contributions received are invested for the benefit of the pensioners,” the minister said.

Mupfumira said the area of NSSA investments has been “shrouded in controversy and accusations of improper conduct”.

“Whilst investigations still need to be completed on specific projects, there are some investments which my Ministry and the public have asked the board to fully investigate. NSSA has a total balance sheet of US$1.3 billion. The NSSA board and auditors are currently valuing all the authority’s assets as some appear to have been overvalued at purchase stage,” she told the National Assembly in a ministerial statement.

Mupfumira said NSSA investments are composed of US$292 million in real estate, comprising developed and undeveloped properties; US$164 million shares in listed and unlisted companies; US$102 million invested to banks and US$90.4 million invested in ‘prescribed assets’.

The investments generate a total income of US$23.5 million, being interest income of US$10.5 million, rental income of US$7 million and dividends US$6 million.

The minister said investment income performance of NSSA “is very poor and we have asked the board to recruit qualified leadership to properly manage the Pensioner’s Fund”.

Among the properties that have attracted public criticism are the following:

Beitbridge hotel, which cost the authority US$45 million. This is a 136 bed hotel which had been budgeted to cost only US$7 million. Celestial Park in Borrowdale, which cost the authority US$32 million in purchase price and US$3 million in other costs against a valuation at time of purchase of US$25 million. Lands in Mutare, Victoria Falls, Gweru, Bulawayo and Kwekwe which were repossessed or had defective titles and are valued at an estimated US$50 million.


© Now Media 2016. All Rights Reserved.


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