HomeLocal NewsNssa flushes US$2m down the drain

Nssa flushes US$2m down the drain

MORE than US$2 million of taxpayers’ funds could have been flushed down the drain by the National Social Security Authority (Nssa) after it paid for a wetland with the intention of developing residential housing units in Harare’s Chisipite low density suburb.

Herbert Moyo

Highly placed sources within the social security say the officials were well aware that the area is a gazetted wetland, precluding any land developments including residential housing units it sought to construct for high-end consumers. Nevertheless they paid Harare City Council for the land which they are now stuck with.

Some sections of the wetland have since been cultivated.

“The swampy area has lent its name, Chisipite, to the whole suburb because of its fountains. You cannot build on it without destroying the water source for boreholes in the whole suburb. It boggles the mind why Nssa, whose investment board was well aware of this, went ahead and purchased the land. Now they are stuck with it and another US$2 million of contributors’ funds have gone down the drain,” a source at the social authority said.

Contacted for comment this week, Nssa conceded the land was gazetted but said they bought the land well before that happened.

“It is not correct to say that Nssa bought the land knowing that the area is a gazetted wetland. This piece of land was not bought from the City of Harare,” said Henry Chikova, acting Nssa general manager.

“Nssa bought the property from a company which owned the piece of land in September 2005. The company was deregistered in 2011 when the property was directly transferred to Nssa. The gazetting of wetlands was done at a much later date.”

Chikova said the land was subsequently gazetted through the General Notice of 313 of 2012 dated 28 September 2012 and the General Notice of 380 of 2013 dated 2 August 2013.

But a Harare-based hydrologist shot down Chikova’s claims, insisting Nssa knew all along that the area was a wetland and has been for as long as Harare city has existed.

“It is a prime area and they should have asked themselves why it had never been developed,” said Chikova.

The Chisipite land deal is the latest in a long list of Nssa’s well-documented poor investment decisions which have cost contributors millions of dollars, spanning various sectors including deposits to non-performing indigenous banks, non-performing listed companies and non-profitable properties. Nssa lost US$50 million it sunk in Capital Bank closed last year.

A 2012 report by the National Economic Conduct Inspectorate (Neci) revealed Nssa was exposed to local banks to the tune of more than US$200 million through a combination of direct equity investments, loans and money market investments in various but mostly indigenous banks.

In June 2012, Nssa was exposed to US$15 million deposited with Interfin Bank Corporation, and US$708 000 with Genesis Bank when it shut down.

Despite these reports and representations by legislators demanding an overhaul of operations at Nssa, government is yet to take action.

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