Tanzania: NSSF Poor Investment Decisions Risk 27 Bn/ - of Members' Money

By Katare Mbashiru in Dodoma

 

PARLIAMENTARY Public Accounts Committee (PAC) yesterday punched holes in the National Social Security Fund's (NSSF) investment in projects that have subjected the government to over ...

27bn/- loss.

As a result, the legislators suggested appropriate legal measures against all officials who signed contracts which led to the loss of members' contributions.

"These white elephant investments risked NSSF members' money," charged PAC Chairperson Naghenjwa Kaboyoka (CHADEMA) when tabling the committee's working report for 2018.

Magu MP Bonaventure Kiswaga (CCM) said as it stands the purchase of different plots of lands by NSSF for investments had all signs of fund misuses.

He requested the government to launch a thorough investigation into the scam and ensure that all people who were involved in the purchase of lands for investments are prosecuted.

In his contribution, Nyamagana MP Stanslaus Mabula suggested the government and NSSF Board of Trustees to ensure investments were guided by Social Security Regulatory Authority (SSRA) and the Bank of Tanzania (BoT) guidelines to avoid embezzlement in future.

"We need to invest in profitable projects and for this to happen, a thorough feasibility study is of paramount importance in any investment," stressed Mr Mabula.

Tabling the committee's report, Ms Kaboyoka singled out all projects that occasioned loss of billions of shillings to the government.

She said the committee's assessment of the CAG report for the fiscal year ending June 2017 found out that members' contributions amounting to 27.1bn/- were likely to be lost due to the management's poor investment decisions.

The projects include the construction of Apollo Hospital in Dar es Salaam where the contract was signed on September 2014 between NSSF and Apollo Hospital Enterprises Limited, Singapore.

"Until now the project has spent 4.19bn/-, however, when the CAG visited the project site on February, 2018, he found that the area was used for DART project, meaning that until now there is nothing going on despite the money being spent," said the PAC Chairperson.

According to Ms Kaboyoka, other projects that occasioned loss to NSSF are the construction of an embassy in Nairobi, Kenya. In the project, NSSF was supposed to provide 77.4bn/- while the ministry of land had to provide land for equity.

However, according to the report, about 854.2m/- had been reimbursed but until the tabling of the report, nothing had been done at the project site.

Another project is the Mkuranga Power Projects where NSSF, Tanzania Petroleum Development Corporation and Tanzania Electricity Supply Company signed the 490 million dollar deal for power generation in Mkuranga District, Coast region.

NSSF procured 100 hectares of land for drilling of 11 water wells at the area and until now, NSSF has spent 3bn/-.

However, the PAC Chairman said, prior to buying the land, no feasibility study was conducted and the plot has no boundaries, risking dispute in future.

NSSF also started to implement the Housing project at Kiseke and Bugarika in Mwanza region 11 years ago, agreeing with Mwanza City Council to purchase 357 plots at Bugarika and 299 others at Kiseke areas at 1.89bn/-.

NSSF has so far dished out 1.51bn/- an equivalent of 80 per cent of the total cost but the audit report shows that NSSF is yet to own the plots as per the contract.

Another poor investment is construction of house on Plot No 249 at Njiro in Arusha region.

According to the PAC report, on November 04, 2010 NSSF signed the contract for procurement of land at 440m/- to construct 34 houses at 14.7bn/-.

NSSF made initial payment of 132m/- in November 2010 and the last payment of 308m/-.

However the audit found out that NSSF had never been given any plot and that the land was invaded by villagers who constructed their own houses.

Another project is Mwandiga Transport Terminal where NSSF planned to implement the international transport centre at Mwandiga area in Kigoma region on the 28 hectares at 33.3bn/-.

Until now all the 28 hectares have been obtained at 1.85bn/-, meaning, averagely one hectare was purchased at 66m/-. But, until the report tabling, nothing is going on the area and already NSSF has paid 1.85bn/-.

The last project is procurement of land in Coast and Dar es Salaam at 15.8bn/-. The committee found out that the land was purchased without the Management Investment Committee (MIC) and without the approval of the board.

Due to the blatant disregard of procurement legislation, the parliamentary committee asked the government to investigate the matter and bring to justice all the officials involved.