Opinion/Editorial
In Summary
News that the government has approved a payment
plan for the loans it owes national social security funds is welcome. If
anything, the deal should have been sealed two or three years ago. Much
as we all agree that there is no way for social security funds to avoid
doing business with the government in an economic setting like ours, a
debt of Sh8.43 trillion is just too heavy for the former to shoulder.
Left unpaid for a long time, such debt may see
pension funds stuck in a cash-flow crisis. This will have far-reaching
economic consequences for members who may need their benefits.
Tanzania needs liquid pension funds to help in the
construction of decent houses for the employed population. With a
shortage of three million housing units, the concerted efforts of
stakeholders--including pension funds--will be required to make it
possible. Going by the data available, owning a decent house is a very
expensive venture for most of the employed population.
According to a UK-based Global Property Guide--a
research firm that sells data to investors in residential
property--Tanzanians yearning for their own homes can only realise their
dreams if they are ready to pay 134 times their annual income. Though a
number of commercial banks offer mortgages, the interest ranges between
18 per cent and 25 per cent. This is too expensive for most Tanzanians.
Pension funds, which are very liquid, can initiate affordable housing
loans for their members so they can build decent houses while they are
still productive and avoid the shame of struggling to own a house at an
advanced age.
It is our view that if such loans are repaid,
pension funds will have enough cash to think about new products and
services that will benefit their members. Investing such money in
building multiple-storey buildings in cities is also a way to beautify
the country. This is why the government must pay all the debts it owes
pension funds.
No comments :
Post a Comment