BY MTHANDAZO NYONI
GOVERNMENT is set to launch a pension fund similar to South Africa’s Public Investment Corporation (PIC) in the last quarter of the year, Finance and Economic Development minister Mthuli Ncube has said.
Ncube said this while responding to a suggestion by one banker who attended the post-mid-term budget review hosted by Alpha Media Holdings in conjunction with the Zimbabwe Economics Society on Friday in Bulawayo.
The banker had suggested that the National Social Security Authority (Nssa)’s investment portfolio should reflect government’s strategic thrust.
“There is a company called PIC of South Africa. They are the public investment corporation. It’s the largest asset manager in Africa and the key thing is it is owned by the pension fund; it’s the equivalent of Nssa to South Africa,” the banker said.
“How do they use the funds? They reflect government strategic thrust in their investment. But by contrast, if you then come to Zimbabwe, that doesn’t happen. We are talking of infusing life into agriculture, but if you are looking at Nssa’s investment portfolio, it doesn’t talk about that. So, if you look at the key differences, it still comes back to the whole nation to then say ‘who owns the fund’?”
He then proposed that Nssa be managed by experts who understand investment.
In response, Ncube said: “I agree with you and as a gap in governance, we are doing something else. We are going to launch a government pension fund which will be even closer to what PIC is. In the last quarter, we will launch that.”
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“It will be smaller and initially, we will grow it and then obviously we fund it in terms of the asset management aspect. Certainly, we won’t give it to Nssa. We will find someone else so that it becomes like PIC, but we are worried about Nssa doing the right things. Then the strategies of investment can reflect the strategies of government and nation in terms of where the investments are being targeted,” he said.
The development comes after Nssa, which was established by an Act of Parliament in 1989 to administer social security schemes in the country, has made a number of serious investment blunders, resulting in public funds being wasted.
For instance, according to the authority’s latest forensic report, about US$79 million was lost through poor investments such as on Beitbridge RTG Hotel, Metbank debt swap properties, Celestial Park, Gateway Investments, Ballantine Park and Nyanga Chalets.
