STATE-RUN pension fund, National Social Security Authority (NSSA) is reportedly sitting on a $1,3 billion fund, but failing to bail out the country’s ailing industry that is in urgent need of retooling, has heard.
BY MTHANDAZO NYONI
Speaking at the Original Equipment Manufacturers Forum organised by the Zimbabwe International Trade Fair in collaboration with the Confederation of Zimbabwe Industries (CZI), captains of industry said NSSA should bail out the ailing industry by availing long-term loans for retooling.
“We understand that NSSA is sitting on a $1,3 billion fund. Why can’t NSSA deposit with the banks for on-lending? It’s an anomaly; it’s a strange thing under the sun,” CZI president, Busisa Moyo, said adding that NSSA’s funds were generated from industry through workers’ contributions.
Moyo said industry would be appealing to through the ministry of Industry for a re-tooling fund of between $250 million and 500 million to achieve import substitution and export generation.
Several industrialists pleaded with NSSA to chip in and offer long-term loans at cheaper rates.
They said short-term loans currently offered by banks were not sustainable for retooling purposes.
Banks are offering companies one-year loan tenure with 10% to 12% interest rate.
Moyo said most companies in Zimbabwe were using obsolete machinery.
He said for example, in Bulawayo, 50% of companies are using equipment that is more than 20 years old, while in Midlands province the figure stands at 70%.
This according to an industrialist, Ignatius Mavunga, has led companies to lose their market share, rising of plant maintenance cost, low utilisation, low exports, among others.
In response, Industry and Commerce minister Mike Bimha, said the proposal was welcome and urged the private sector to pursue it.
“We want the private sector to come up with such proposals. Our job is to listen to you. What you are saying makes sense because NSSA gets its money from industry. I will welcome such a paper,” Bimha said.
Moyo said they will submit their proposal to the government soon.
NSSA, whose investment portfolio includes money market, property, short- and long-term investments in associates and subsidiaries among others, has lost millions as a result of poor investment decisions.
It lost $50 million when it tried to rescue the then ReNaissance Merchant Bank.
The bank, which was rebranded to Capital Bank, surrendered its banking licence in 2013 after the authority said it could not continue pumping money into the struggling entity.
NSSA also lost about $16 million in other banks that have been shut down. It had $15 million deposited with Interfin Banking Corporation, which closed in 2012 after gross abuse of depositors’ funds was unearthed.
NSSA had more than $750 000 in Genesis Bank, which collapsed in 2012.
Yet retired workers were getting a meagre $60 in pension payouts. But the government recently instructed it to review payouts gradually to $150 by the end of the first half.