The government will next year set up an inter-ministerial subcommittee to monitor investments by the National Social Security Authority (NSSA) amid concerns the authority was deviating from its mandate.
The government wants NSSA’s investment interventions to support programmes closer to the hearts of its key constituency – employees.
“As the government, we are concerned that NSSA investments are not being loyal to key issues that affect workers, particularly housing and public infrastructure,” said Finance minister Tendai Biti in his 2010 National Budget.
Biti said the NSSA Act makes it clear that financial guardians of the authority were the ministers of Labour and Social Services and Finance.
“Unfortunately, this part is not being fully respected and, therefore, within the new year, an inter-ministerial subcommittee will be formed to monitor NSSA investments, consistent with the law,” he said.
NSSA, constituted and established in terms of the NSSA Act of 1989, Chapter 17: 04, is the statutory corporate body tasked by the government to provide social security.
The provision of social security can be defined as instituting public policy measures intended to protect an individual in life situations or conditions in which his/her livelihood and well being may be threatened, such as those engendered by sickness, workplace injuries, unemployment, invalidity, old age, retirement and death.
However, Biti commended NSSA for on-lending at rates of around 10%, significantly below prevailing market rates of between 15 to 30% per annum.
“This is important in ensuring companies have access to reasonably priced liquidity support, which has been in short supply since the adoption of the multiple currency regime,” he said.
“We call upon banks accessing NSSA funds to act responsibly, and comply with the requirement not to exceed the stipulated mark up of 5% on NSSA funds.” NSSA recently put a cap on interest banks accessing money from the authority for onward lending not to charge the borrower more than 15% per annum, including interest and handling fees.
NSSA has been linked with several investments that have drawn criticism from some quarters.
Last month it was revealed ReNaissance Merchant Bank (RMB) curator Reggie Saruchera asked NSSA to invest in the bank and gain a controlling shareholding to rescue the institution from collapse.
When problems surfaced at RMB, Biti approached NSSA to invest in the bank and stabilise the situation. He wanted to avoid the contagion effect spreading in the financial sector.
RMB was placed under curatorship in June this year. NSSA has $8,9 million locked up in RMB.