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| Director General for Social Security Watchdog, Irene Kisaka stress a point before journalists.
By ADAM IHUCHA
Tanzanian pensioners are looking forward to better
days after social security funds in the country recorded high returns, signaling
good retirement packages.
According to the country’s Social Security Regulatory
Authority (SSRA), six pension funds made a record overall return on assets of
Tsh6.4 trillion ($4 billion) in the year ended June 2013, up from Tsh5.6
trillion ($3.5 billion) last year.
The director general of SSRA, Irene Kisaka, said the
funds’ investments rose from Tsh4.2 trillion ($2.6 billion) a year ago to
Tsh4.9 trillion ($3.06 billion) this year.
The funds’ investment portfolio has been moving
towards fixed income assets, and smaller amounts in equities and properties.
Economists say this can be attributed to limited investment options due to low
development of the financial market.
Contributions have grown from Tsh1.4 trillion ($875
million) in 2012, to Tsh1.6 trillion ($1 billion) this year, according to Ms
Kisaka. The growth is accredited to a membership increase from 1.7 million in
2012, to the current 1.8 million members.
“As a result overall membership benefits payments have
also improved from Tsh724 billion ($453 million) in 2012 to Tsh1.06 trillion
($663 million), the highest amount ever been paid,” Ms Kisaka said.
The number of pensioners has increased from 72,000 in
2012 to 78,000 this year, and the challenge now is to ensure that members
access some of the benefits while they are still working.
In October, SSRA asked employers to give equal
opportunity to all funds and allow new employees to join a social security fund
of their choice.
Early this month, the SSRA said that all
recommendations made on benefit harmonisation of pension funds are now at the
Cabinet level.
“If approved, the harmonisation process will take
place before 2015, where there will be free movement of members from one fund
to another with the same benefit rights,” the authority’s director of
Compliance and Registration, Lightness Mauki, said.
Abdallah Saqware, a senior social security and risk
management lecturer at the Institute of Finance Management in Dar es Salaam
said the growth was a sign of improved funds management.
“The new statistics show that the fund’s management is
good, meaning that the social security watchdog has done its homework
perfectly,” Dr Saqware said.
The SSRA must now ensure the fund’s growth translates
into benefits for pensioners, he added.
“SSRA should now tell us how this growth has improved
the package for pensioners, otherwise the growth will be meaningless,” Dr
Saqware said.
Social security schemes’ products, such as mortgage
facilities, loans for education and business are currently on the increase.
Some funds have already started issuing loans through
saccos.
The National Social Security Fund (NSSF), Provident
Pension Fund (PPF), and Local Authorities Pension Fund (LAPF) are putting up
housing facilities for their members.
The NSSF is also venturing into new areas of
infrastructure and agriculture, suggesting a shift in the fund’s investment
attitude.
The country’s largest state-run-pension fund has
traditionally been skewed towards government securities, bank deposits, equities,
corporate bonds and real estate.
Now the Fund plans to invest $75 million in these new
forays.
Establishment of a $40 million Inland Container Depot (ICD) in Kisarawe
area, nearly 85km away from Dar es Salaam Port, and a $35 million cashew nut processing
plant in Mtwara are also on NSSF’s investment list.
The NSSF director for planning, investments and
projects, Yacoub Kidula said plans were underway to acquire 100 acres of land
to set up the ICD.
“The construction of the ICD will commence in July 2014, and
will handle a 1,000 twenty-foot equivalent unit (TEU) to decongest the Dar
port,” he said.
The long-term plan is to expand the ICD to a capacity
of 3,000 TEU, he added.
The NSSF director general Ramadhan Dau said the fund
would venture into cashew nut processing, not just for profit, but also to
create employment.
Traditionally, Tanzania has been exporting raw cashew
nuts at low prices.
The world market price for raw cashew nut is less than
$1 per kg, but processed nuts sell at $7.
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Economic
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