NSSF embarks on low cost housing project

By Michael Haonga

A low cost house

National Social Security Fund (NSSF) has embarked on a low cost housing project in the country to enable its members own modern houses at affordable prices and improve their living standards. This project has taken into account various factors.

The majority of Tanzanians – more than 80 per cent - live in rural areas and depend on agriculture for food and income. Due to the use of traditional farming methods and unreliability of rainfall, there is often low agricultural production, which in turn leads to low food and cash crop production.


Consequently, many farmers experience food insecurity and inadequate income and because of this they cannot afford a decent house.

In the workplace, the majority of workers belong to (using International Labour Organisation’s phrase) “the working poor” category. That is, they may be nominally earning a decent salary, but due to the fact of having many dependants, in reality each earns less than 1.25 UD Dollars a day.

Although Tanzania’s economy is growing, given the fact of its long time political stability, abundant natural resources and investment projects in various sectors of the economy (macro-economy), this growth has not been translated into the lives of ordinary people (micro-economy). That is why there is a widening disparity between the rich and poor.

As a result, the majority of Tanzanians are still in abject poverty and in poor or inadequate housing although this shouldn’t have been the case. To substantiate this, one has only to visit suburbs and rural areas across the country.

To address this situation, the government has been coming up with various poverty reduction strategies meant to transform the nation into a middle-income economy (National Vision 2025) and enable Tanzanians to lead a decent living and improving their housing status – the latest being Kilimo Kwanza and Big Results Now.

To complement government efforts, each fiscal year National Social Security Fund (NSSF) has been setting aside at least 75 per cent of its investible funds for investment purposes. The remaining 25 per cent is spent on benefit payments and administrative and capital development purposes.

“NSSF commits its resources into high yield investments to be able to offer meaningful benefits to its members.

This means all undertaken investments, as far as possible, provide a positive rate of return, to maintain the value of members’ funds. We are committed to enabling our members to own decent houses,” the NSSF director-general, Dr Ramadhan Dau, told this reporter during an exclusive interview.

He said one of such investments was NSSF’s long-term project to construct low cost houses for its members and their families, a move that could drive millions of Tanzanians out of inadequate housing. “In Kijichi, Temeke District, Dar es Salaam, NSSF has constructed 297 low cost houses, which may be purchased or loaned,” he said.

These houses were formerly loaned through Commercial Bank of Africa (CBA), but now NSSF will loan them at an interest rate of 11. 44 per cent per year and the loan will be repaid in 15 years.

They are of two to four bedrooms each and the price is fixed at Sh 64, 875, 310 to Sh112, 500, 000 (VAT excluded) respectively.

“NSSF members interested in purchasing the low cost houses may go to NSSF offices at Benjamini Mkapa Towers to enquire about a purchase procedure,” he further said.

According to Dr Dau, there are 10 types of house designs comprising two to four bedroom houses. The average size of each house is between 75 and 125 square metres.

“The houses are differentiated on the basis of built-up area, the number of rooms and extra-facilities incorporated in each house, for instance, carports, solar water heating systems and provision of house expansion,” he explained.

Members, who intend to purchase any house using outright purchase arrangements are required to get an application form at a non-refundable fee of Sh5,000 from any of the NSSF’s offices, fill in all requisite information about their membership and return it for prequalification.

“After prequalification, a letter of offer will be issued and the prospective buyer will be required to complete all purchase formalities and full payment for the house within seven working days since the issuance of the offer letter. Any delay beyond this time frame will lead to automatic termination of the offer and forfeiting of any amount so paid,” he said.

For her part, chief public relations and customer service Eunice Chiume told reporters in Dar es Salaam recently that NSSF would continue addressing housing challenges for its members.

She noted that due to high housing demand NSSF would continue to construct low cost houses to members to enable them to live in permanent houses.

“After completing phase I and II of 297 houses, we have seen that there is a need to continue addressing this problem and in phase III will involve constructing 900 houses, which will cost about Sh23 billion,” said Chiume.

She added that starting on Monday this week, NSSF expected to start issuing application forms for purchasing 498 surveyed plots in Kiluvya A Madukani, the plots that will be sold in collaboration with Kisarawe District Council. “This is a new residential area, which will have basic social services,” she said.

The plots will be sold to NSSF members and to members of the public at an average of Sh15,000 to Sh20,000 per square metre depending on plot use.

NSSF, which is a compulsory scheme providing a wider range of benefits based on internationally accepted standards, was established by the Act of Parliament No 28 of 1997 to replace the defunct National Provident Fund (NPF). 

SOURCE: THE GUARDIAN