Q&A: “We will regularly report on performance”

THE continued under-performance of parastatals and state entities make it difficult for them to escape public scrutiny. In particular, how the National Social Security Authority (NSSA) handles public funds has been the subject of many enquiries. A recent report compiled by Deloitte Advisory Services indicated the extent to which corporate misgovernance affected the entity.
Government will soon come up with a legal instrument, the Public Sector Governance Bill, to soundly and efficiently govern parastatals.
The Sunday Mail Business reporter Africa Moyo (AM) last week sought the views of NSSA board chairman Mr Robin Vela (RV) in the latest development at the Authority.
AM: How authentic is the report allegedly compiled by Deloitte Advisory Services which indicates massive financial prejudice to NSSA, and how seriously is it being treated by the new board?
RV: The Deloitte Audit Review (the “Review”) was commissioned by the then newly appointed board of the National Social Security Authority (the “Board”), having received the consent of the Auditor General in August 2015 soon after we took office.
The outcome of the review is being taken very seriously.
As you may appreciate, it is an exhaustive report and we are in the process of fully examining and seeking further investigative work to be carried out in certain areas.
We look forward to reporting back to the Minister, stakeholders and the public with at least our preliminary findings by the end of the first quarter.
However, we have already instituted a number of reforms such as tighter investment decision-making process, monitoring and controls which are a response to this review as well as a previous one done by the Comptroller and Auditor General.
AM: How much was creamed off and what measures are being taken against the culprits?
RV: We are still going through the report after which we will be able to give a full assessment of the financial losses and prejudice to members.
We will then, in consultation with the Minister, decide on appropriate action to take.
In the meantime, we have reached and signed retrenchment agreements with four of the five senior managers (the remaining one having been out of the country) that were relieved of their duties in October last year, the result being a net repayment to NSSA relating to loans held by the individuals.
AM: NSSA’s image in the eyes of Zimbabweans in general and pensioners in particular is now soiled. What steps are you taking to ensure that the public re-builds confidence in the organisation?
RV: In October last year, the board began a restructuring exercise in order to improve corporate governance, reduce operational costs, improve service delivery, accountability and deliver a higher return on worker’s contributions together with a living pension.
The changes extend to our investee companies where we have taken measures to reconstitute non-performing boards and demand more from their management.
Five months in, we are happy with the progress made to date and believe that once fully implemented, the restructuring will result in better investment performance and higher investment income and increased payments to pensioners.
Ultimately a relationship of trust is built on transparency and accountability.
As a board, we intend to lay all our cards on the table and will report regularly on performance and increase the financial disclosures we make, including board and executive remuneration.
The board also believes the NSSA investment committee’s competence and integrity should be beyond question – public perception wise but also in actual reality.
The board, with the consent of the Minister, in December 2015 appointed an Independent Investment Expert to the committee.
Fungai Ruwende is a Zimbabwean, professional qualified and experienced investment expert who has operated at the highest level in the investments space.
Fungai is a former partner of Actis, Africa’s leading emerging markets private equity firm managing in excess of US$7 billion of funds in Africa.
Fungai is also a former member of the PIC Investment Committee for Africa private equity and Infrastructure, a South African US$$100 billion pension funds manager with US$4,5 billion allocation to private equity in Africa.
Fungai has also held chairmanship, directorship and consultancy roles for, inter alia, AfrAsia Holdings Zimbabwe, African Lands Investments, and Bain & Co (London and Johannesburg).
Fungai has a Harvard Business School MBA and is an electrical engineering graduate from the University of Zimbabwe.
AM: What else is the NSSA Board doing to ensure its operations are transparent?
RV: A formal update statement for the period up to December 31, 2015 will be provided by the end of January 2016.
Fuller disclosure as you would expect for listed and public entities will be incorporated into NSSA’s annual financial statements for the year to December 31, 2015.
These statements need to be audited before being released.
This is different from the update statement I give quarterly and expect to deliver for the quarter period to 31 December 2015 by 31 January 2016.