TANZANIA SOCIAL SECURITY FUNDS STABLE DESPITE DEFICITS

Minister for Labour and Employment, Gaudentia Kabaka.

MWANZA, Tanzania -  Tanzania social security funds are experiencing deficits, but all are stable writes ANDREW ZABLON.

The Minister for Labour and Employment Gaudentia Kabaka told East African Business Week recently, there was no cause for alarm because all the social security funds are financially stable. 

“Being in deficit does not necessarily mean that you are making losses,” she said.

Of recent, media reports, MPs and some professionals have highlighted the soaring government debt. This is by virtue of being the major borrower from these funds. Critics have suggested the chances for these social security funds to survive were slim.

The government owes over Tsh7.134 trillion ( about $4.259 billion) to all the six funds.

“We need not create fear among the members of these funds. The situation is under control, because the major borrower is the Tanzania government,” she said. She said anything with the government is safe.

Following recent reforms in social security schemes, all schemes can now provide social protection services to both private and public organizations and individuals.  

The Social Security Regulatory Authority (SSRA) supervises six mandatory social security funds, with Tsh6.4 trillion (about $3.825 billion) in assets, and about Tsh5 trillion (about $2.98 billion) in investments.

SSRA portfolio includes real-estate, equities both listed in the Dar es Salaam Stock Exchange and unlisted, and a fixed income portfolio that include treasury bills, treasury bonds, promissory notes, fixed deposits reserves, loans and corporate bonds.

These six social security funds are NSSF, PPF, GEPF, LAPF, PSPF and NHIF.

The Minister said reports that the funds are facing bankruptcy are not supported by professional financial audit. She said the last Actuarial Valuation indicated that the funds were safe and stable financially. “What the funds are experiencing is a financial shortfall and the government is paying back its debts,” she said.

East African Business Week