HARARE – Non-performing investments has seen National Social Security Authority (Nssa) writing off $18 million from its balance sheet.
General manager, James Matiza however, said there was hope to recover $16 million which went down with the closure of Interfin Bank.
“The total write-off of $18,153 million impacted negatively on the bottom line coupled with the low performance on contributions and premiums,” he said.
“However, it has to be noted that the $16,109 million debtor’s provision on money market investments can still be recovered in full as there is security to this effect.”
However, insiders say the company is only holding on to $3 million worth of gold bonds provided by the failed bank.
Nssa, established to provide a social safety net to contributors in the social security scheme, also saw vast tracts of land in Bulawayo, Masvingo, Rusape and Victoria Falls it had been given to develop residential stands were repossessed by the local authorities.
“The hyperinflationary environment mitigated against our plans and when we started dollarisation we reviewed our 10-year plan, but I guess we were a bit late as development stands we were given by various city councils were repossessed due to our failure to service them,” said Matiza.
“The agreement we signed allowed us to develop the land in a period of 18 months but we couldn’t fulfil our part due to the hyperinflation. We are still pursuing the re-instatement of the land back to us. So far we have managed to recover two stands in Masvingo.”
In the full year to December 31, 2011, Nssa paid out $55,3 million in claims against total income of $221,8 million.
The audited results show that pensioners received as little as $40 per month in payments.
In the same period, Nssa recorded an accumulated fund of $371 million from $247 million in 2010 with operating expenses increasing from $30 million in the prior year to $43,5 million.
Nssa’s balance sheet grew by 30 percent in the period to $592 million, from $456 million in 2010. Property investments were at $97,4 million, up from $87,2 million in the prior year, due to an increase in the prices of land and buildings during the period.
The social security giant is one of the largest institutional investors on the Zimbabwe Stock Exchange, with equity investments worth $64,4 million.
Nssa is a significant shareholder in listed companies such as AICO Africa Ltd, where it has a 22 percent stake, FBC Holdings (26,4 percent), FBC Building society (40 percent) ZB Financial Holdings (37,9 percent), 28 percent in Rainbow Tourism Group and 24 percent in Star Africa.
Money market investments accrued interest at an average rate of 22 percent in the first quarter but declined to 13 percent for the rest of the year.
Nssa’s strategic asset allocation for the two funds in 2010 was 30 percent in equities, 20 percent in money market investments, 25 percent in property, 10 percent in prescribed assets, 10 percent in housing and five percent in an empowerment fund.
Matiza said the slow economic recovery pace was hampering the growth of funds.
“With the sluggish pace of economic recovery, a number of companies were shedding labour. This reduced the contribution base for Nssa while at the same time increasing the number of citizens in need of social protection.”
The low life-expectancy also posed viability risks for Nssa’s schemes, as the life of contributors was cut short while the number of dependents eligible for survivors’ pensions increased, Matiza added. – John Kachembere