PARLIAMENT last week reopened debate around National Social Security Authority chairman Edwin Manikai’s involvement in the pension authority’s contentious investments.
The statutory pensions body, worth billions of dollars in revenue collected monthly, has sprawling investments ranging from properties to listings in other industrial sectors, both private and public.
Manikai’s institution became the subject of serious scrutiny when MDC MP Priscilla Misihairabwi-Mushonga’s portfolio committee on public accounts observed that NSSA had “no proper investment register” for its holdings in equities, prescribed assets and other properties.
Such loopholes, parliament said, meant the authority was susceptible to manipulation.
“NSSA investment policy focuses on security instead of balancing security and returns,” the committee noted after gathering oral evidence from NSSA executives including Manikai.
Quite significantly, the committee noted that Manikai’s powers over limits of investment and how much investment he can carry or sanction without board approval could be overbearing.
That Manikai can single-handedly okay NSSA deals worth $200 million, an issue supported by a board resolution in November last year, potentially meant his powers could mask cases of possible conflict of interest.
“In cases of conflict of interest, the limits of authority on share disposals set aside for the chairman tended to disregard checks and balances that are the norm in the handling of financial transactions,” the committee said.
The committee not only felt such an arrangement was flawed and irregular, but that the Harare lawyer could buy or dispose of shares using powers vested in him and “only to report” a particular transaction afterwards.
“He (Manikai) has decision-making powers for share dealings above 10% and up to 20% (of project costs) without board endorsement. This is tantamount to abuse and usurping the general manager’s powers,” the committee said.
The committee felt, therefore, that Manikai enjoyed total control and was now “acting as the de facto executive” and this compromised corporate governance and prudent execution of financial commitments.
Noting that board representation was heavily tilted in government’s favour, the committee said the anomalous — and potentially calamitous — investment policy where risk was not thoroughly weighted, had resulted in unwise decisions to invest in the Bulawayo-based Ekhusileni Medical Centre, Joina Centre and the Cotton Company of Zimbabwe’s staff empowerment scheme, Tonje.
Apart from these, NSSA has been fingered in a number of dodgy deals which are yet to be made public.
While NSSA board representation is supposed to reflect the tripartite edifice of government, labour and employers, it has been undermined by the withdrawal of the Zimbabwe Congress of Trade Unions (ZCTU), a key constituency in the smooth operation of NSSA. The ZCTU pulled out over government’s alleged insincerity in implementing critical reforms that favour all parties involved.
And in a tacit suggestion that the government needed to re-look the issue, Misihairabwi-Mushonga’s committee said “such representation (board) should be balanced so that no single group is prejudiced”.
NSSA, whose mandate also includes development of mass infrastructure, owns various shopping complexes countrywide and has of late ventured into housing development in peripheral areas such as Chinhoyi. Quite recently, it built a multi-billion dollar complex in southern Gwanda.
Its investment culture, including stock market positions, has come under constant attack because fund contributors — essentially Zimbabweans frustrated with its low gratuities and painful claim process — sometimes feel its choices favour a minority elite of state-linked fat cats.
To underline stakeholders’ fears of its somehow shambolic business principle, NSSA has not been forthcoming with an externally audited set of accounts and annual report as required by law, the committee’s findings suggest.