NSSA Eroded With Inflation
The moratorium resulted in the value of US$150 million in cash holdings seriously eroded by inflation in the later part of the moratorium. National Social Security Authority (NSSA) pensioners have not only suffered from questionable investments, as uncovered by a forensic audit, but also from a 15-month moratorium on new investments.
The ban on new investments was imposed by the Public Service, Labour and Social Welfare Minister Priscah Mupfumira in February last year, around the same time that a full forensic audit of NSSA was started.
The rationale for the moratorium was to prevent further investments that could be regarded as suspicious, criminal or just incompetent. On assuming office in September last year, the new minister Dr Sekai Nzenza, maintained the moratorium as the forensic audit was still in progress.
Sources at NSSA allege that after the introduction of the interbank market in February, the 1:1 rate collapsed, leading to the erosion in value. There are concerns that the money lost value at a time when pensioners are earning a pittance, which can barely buy a 10kg bag of maize-meal.
Reads part of a dossier availed by sources within NSSA; “Since late 2018, NSSA board was instructed by the minister not to carry out commercial and trading activities of its investable funds. As a result, an amount of US$150 million then remained in NSSA bank accounts earning no interest and no financial gain.”
The Herald has established that Minister Nzenza lifted the moratorium in April this year, a month after the forensic audit was concluded and two months after the present board took office. The moratorium was lifted on the condition that the board would follow through on all the findings and recommendations of the forensic audit report.
Responding to the allegations, NSSA board chairman Dr Cuthbert Chidoori said: “At the time the current board came into office (February 2019), it found out that in February 2018, the then Minister of Public Service, Labour and Social Welfare (MPSLSW), had called for a forensic audit on NSSA activities covering the period 1st January 2015 to 28 February 2018.
“The minister had also put a moratorium on all investment activities pending the conclusion of the forensic audit. This all happened during the tenure of the previous board whose tenure expired on 12th October 2018. “The authority was, therefore, unable to carry out normal investment activities since then, resulting in the accumulation of large cash balances.”
Dr Chidoori said when Minister Nzenza came into office, she only “reaffirmed the moratorium” since the forensic audit was not yet complete. He said Minister Nzenza directed that the moratorium should remain in force until there was a new board.
“The minister explained to the current board during their induction that the reinforcement of the moratorium was indeed necessary after noting the lack of due diligence and the losses incurred on some investments in NSSA,” said Mr Chidoori.
“The minister was also waiting for the outcome of the forensic report on investment and suspected massive irregularities and some of them which have turned out to be criminal.” The forensic audit was completed in March this year and the moratorium was lifted the following month after the board gave assurances it would follow through on all the findings and recommendations in the forensic report.
Last week, Minister Nzenza described as “hogwash”, claims that she made unilateral and unprocedural decisions in the selection and remuneration of the ICT specialist and lawyers tasked with unpacking the forensic audit report. Dr Chidoori said procedures in the Public Entities and Corporate Governance Act were followed to clean up NSSA.
Explaining the process of the board’s clean-up programme he said: “To follow through on all the recommendations detailed in the forensic report, the board identified the five key areas where there were serious irregularities namely, Information and Communication Technology (ICT), Properties, Investments, Human Resources and Corporate Governance.
“With the concurrence of the minister, a team of six expert lawyers was appointed in full compliance with the procurement laws and regulations of Zimbabwe for a period of 30 days. They were required to comb through the detailed forensic audit report, together with the massive boxes of the annexures and to identify organisations and individuals within and without NSSA, who were to blame for the plunder of NSSA resources identified in the report.
“Notwithstanding the delays suffered in preparing and obtaining approval of the contracts, the expert lawyers produced a comprehensible report for the board and the ministry for their adoption on the way forward.”
Dr Chidoori said the forensic report unearthed scams in NSSA, where huge sums of money which runs into hundreds of millions of US dollars had been lost through the shenanigans of some individuals at NSSA.
Twenty-four workers have been sent on forced leave to pave way for investigations, and those absolved will return to work. The audit found most of the 24 were irregularly appointed without being the first in their interviews, where these were held. The NSSA board will seek to regularise these appointments.
“The forensic report has uncovered huge amounts of money which were given to staff as loans in breach of the conditions of service,” said Mr Chidoori.
“There are allegations of lavish lifestyles by NSSA staff, while pensioners wallow in poverty, possibly necessitating a lifestyle audit. The board will seek to recover all monies, including monies which may have been given to staff who are no longer with NSSA.”
NSSA last week announced significant increases in pensions, with the minimum general pension rising to $200 a month from $80, and those who were getting above the new minimum having a 65 percent rise.
Source – The Herald