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The National Social Security Authority is one of the few cash rich organisations in an economy thirsty for liquidity. In terms of cash resources, the only company that can rival NSSA is probably financial services giant Old Mutual Zimbabwe. Prudent investments over the years have meant that the authority gets a fair return while its coffers are boosted every month through a three percent tax paid by workers and employers.
However, there is a feeling that NSSA investments are not benefiting the ordinary person, the majority of whom have played a part to bring the parastatal to its present status.
Public Service, Labour and Social Welfare Minister Prisca Mupfumira wants NSSA to invest in projects with a wider socio-economic impact.
“They should build a developmental portfolio which includes infrastructure, housing, medical support (and) agriculture,” Minister Mupfumira said in a story carried in Business Chronicle yesterday.
Most of the parastatal’s investments have been in real estate, equity markets and listed companies, investments which bring little or no direct benefit to the worker.
Granted, the lucrative returns from these investments make it possible for the parastatal to be able to pay out pensions, we believe that most workers would prefer a situation where they can get a mortgage from NSSA and buy or build their own house instead of waiting until they are 60 years old to benefit from a $30 monthly pension.
In the same vein, if NSSA can fund Small and Medium Scale Enterprises, it means that its revenue base, in terms of premiums, would be widened as more workers are employed by the sector.
With the economy now dominated by small and medium enterprises, NSSA can play an important role in capitalising this sector.
Most established financial institutions are averse to providing funding to SMEs no matter how good their business proposals are because they consider them risky.
With the economy in the hands of SMEs, we believe that funding this sector will only propel growth.
But shifting focus to development and social investment does not mean the NSSA board should throw caution to the wind.
NSSA is a custodian of public funds and this role should continue despite the change of investment policy.
The parastatal needs to jealously guard against people with a feeling of entitlement in that since NSSA is a public organisation, they can help themselves to the money without bothering about repaying the loans.
NSSA’s money belongs to workers and should be safeguarded by ensuring that only viable projects with a capacity to repay loans are assisted.
As a starting point, the board should consider setting aside a percentage of its investment budget for socio-economic development and observe how the investment performs.
The money can be gradually increased depending on performance.
Giving out loans to SMEs should not be a free for all as this might mark the demise of NSSA.
Online Reporter