HomeLocal NewsNssa widens scope, plans to court foreign investors

Nssa widens scope, plans to court foreign investors

LAST year, the National Social Security Authority (Nssa) was in the news for both positive and negative reasons and these include: acquiring a controlling stake in the Rainbow Tourism Group, increasing its minimum pension payout amid an outcry by the public over the hefty salaries and perks enjoyed by Nssa management, to mention but a few. This week, Zimbabwe Independent reporter Hazel Ndebele (HN) caught up with Nssa general manager and chief executive Elizabeth Chitiga (EC) to discuss a wide range of issues and Nssa’s plans for 2018.

HN: What are some of Nssa’s plans for the year 2018?

EC: Nssa will soon be extending social security coverage to the informal sector, domestic workers and those in the diaspora through the Voluntary Informal Sector Scheme. The authority plans to extend social security coverage in tandem with the social security priority agenda obtaining elsewhere in Africa. According to the Zimbabwe Statistical Agency (Zimstat) 2014 survey, 94,5% of Zimbabwean informal workers translating to 5,6 million people are without social security, and the number could be even higher considering domestic workers and the diaspora.

Nssa is penetrating by spreading its tentacles in these excluded sectors in order to close the gap by extending coverage to all Zimbabwean workers beginning this year, 2018. Nssa will penetrate using a sector-specific phased approach until it covers the entire spectrum.

HN: To what extent is Nssa investing in agriculture?

EC: Nssa will continue to support Command Agriculture through provision of funds to fertiliser companies for the local manufacture and distribution of basal and top dressing fertiliser after having availed facilities to the tune of US$20 million during the 2016/2017 agricultural season. A total of US$9 million has been disbursed for the 2017/2018 summer cropping season, as the authority is working on a financing structure which will enable selected banks to disburse up to US$30 million by February 2018 to fertiliser manufacturing companies. This will enable the production of 50 tonnes of fertiliser, boost value addition and contribute to national food security.

HN: What is Nssa doing for vulnerable segments of society, for instance the disabled?

EC: Nssa has noted that there are several of its severely disabled pensioners retired under the Accident Prevention and Worker’s Compensation Insurance Scheme who are living in deplorable conditions, especially in the rural areas. The authority therefore resolved to provide decent shelter to this group of vulnerable citizens. We intend to complete the first 30 housing units within the first quarter of 2018 out of the targeted 200 units. This will reduce risk of medical complications and further injuries to the severely disabled pensioners.

HN: Are there any other plans on housing delivery and Nssa investments?

EC: In line with Nssa’s investment thrust, the authority, working with its bank NBS and other developers intends to construct 1 800 houses during the first quarter of 2018. We are committing US$90 million towards the provision of decent accommodation to contributors while the return on investment will help grow the reserves for the future sustainability of the fund. Nssa also envisages to be the point of reference for investments. We want to play a leading role in the strategic sectors that we have chosen. In line with government’s thrust of quoting investors, Nssa is looking to partner foreign investors on some of its selected projects.

HN: In 2017, Nssa increased its monthly pension payout from US$60 to US$80, and the pensioners also received their 13th cheque. Will we see this trend continue?

EC: It is Nssa’s core strategy and the board’s desire to sustain a liveable pension to all its pensioners. This vision has remained intact and its implementation is under constant review and, where necessary, adjustments are made to accommodate changing circumstances. The board will continue to use its discretion and when and where funds permit award cost of living adjustments and Christmas bonuses to pensioners subject to actuarial valuations. The board had promised to review pensions upwards and alongside paid a 13th cheque in 2017 across the board since the introduction of multi-currency era. The dual gesture of pension increment and bonus payment shall remain entrenched and a prerogative of the board from time to time.

HN: Please give us an update on the setting up of the National Health Insurance and the Maternity Protection schemes.

EC: Development and implementation of a scheme is quite involving. Working on more than one scheme at a time minimises chances of successfully implementing the schemes. Nssa is currently concentrating on successful implementation of the voluntary informal sector scheme and will consider other schemes at a later stage.

HN: There was an outcry over Nssa managers’ hefty perks after Auditor-General Mildred Chiri observed in one of her audits that Nssa’s management contracts had amounts which were in excess of the approved framework by the secretary for Public Service, Labour and Social Welfare in May 2016. How does Nssa justify these packages and has Nssa done anything about this?

EC: Nssa is on an approved total-cost-to-company remuneration framework which was set by the board and approved by the minister. The remuneration is pitched to attract talent necessary to manage the US$1,4 billion fund.

HN: Now that the Nssa has majority shareholding in the Cold Storage Company (CSC), what plan does it have for the company and when does the authority expect the parastatal to start operating at full throttle?

EC: The deal has progressed significantly with draft agreements submitted to government through the Ministry of Finance for sign-off. Nssa is currently conducting pre-due diligence exercises at CSC, and has seconded a Nssa resource person to work with the current board and management of CSC in reviewing their strategy and structure. It is anticipated that once the shareholder agreements have been signed off with the relevant ministries within government, the due diligence processes will be conducted.

Such due diligence will enable Nssa to develop a sustainable business plan to be followed by the injection of capital in the 1st half of 2018. This investment is part of efforts to grow and improve sustainability of the Nssa fund and is in line with government’s thrust of Command Livestock. The revival of CSC will empower communal and commercial cattle farmers and contribute to the resuscitation of the agricultural industry.

It is difficult to say when CSC will operate at full throttle. However, the country will be updated through quarterly statements that will be issued by the authority.

HN: Nssa also increased shareholding in the Rainbow Tourism Group. What are the plans for RTG going forward?

EC: RTG is a key investment for the authority, being a leading player in the tourism sector. The authority believes the group has potential to grow and contribute meaningfully to foreign currency generation on the back of sufficient shareholder support to improve their balance sheet and product offering.

On December 21, the company issued a circular to shareholders, in which it is proposing to restructure its balance sheet and raise additional capital to meet working capital requirements. This capital raise is anticipated to enable management to pursue initiatives through pursuing various opportunities leading the company to profitability.

HN: At some point last year Nssa considered various viable options on the US$49 million Beitbridge Hotel, one of them being turning it into residential apartments for civil servants. Can you give us an update on what the Nssa board has decided on the hotel and some of its other investments such as Celestial Park?

EC: Discussions are ongoing with local and international players for the operation of the hotel. The authority is developing a viable long-lasting solution that is sustainable and is in line with the One-Stop Border Post concept, which is being developed and will be implemented at Beitbridge. Celestial Park has seen us double occupancy to 89,2% in the past year on the back of provision of permanent power at the complex, which was the biggest impediment to attracting quality tenants. In addition, there are positive inquiries from blue chip companies and legal firms who are keen to take up space. The authority is focussed on achieving close to 100% occupancy by end of 2018.

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