'PSPF in intensive care unit'

PSPF acting Director General, Adam Mayingu

 

By The guardian reporter

The Public Service Pension Fund (PSPF) will collapse in three years’ time if urgent steps are not taken to rescue it by injecting more funds, Parliament was told here yesterday.

Briefing the Parliamentary Standing Committee on Public Accounts, PSPF acting Director General Adam Mayingu said his organization is “currently in a serious financial crisis.”

He said the Fund’s financial liabilities were growing more than the increase of contributions and investment income, making payment unsustainable.

He said the best practice required a Fund to have a funding of around 80 percent of its liabilities but PSPF is currently 10.1 percent funded.

“If this trend is not checked immediately, PSPF will in the near future resort to government to meet the liabilities of its members,” he said.

The Public Accounts Committee (PAC) summoned the PSPF management and the Social Security Regulatory Authority (SSRA) to Dodoma yesterday to try to get a clear picture of the Fund, including looking for means to address its precarious financial position.

Deputy finance minister Janeth Mbene and the Deputy Permanent Secretary Elizabeth Nyambibo attended the meeting.

Explaining, Mayingu said the financial crisis was initially triggered by failure by the government to inject 250bn/- as a response to address the pre-July 1999 actuarial deficit.

He said the same report that came up with the actuarial deficit of 250bn/- also projected that the liabilities would jump to 658.23bn/- in year 2006 of which it would need raising the contributions to meet the liabilities.

In explaining how things went from bad to worse for PSPF, Mayingu said in 2003 before the Fund started paying benefits, the first official actuarial valuation was conducted showing a deficit of 933.4bn/-.

The shortfall was to be paid by the government as the liability related to the period when the scheme was non-contributory (before 1999). The funding level at the time of valuation was 93.3 percent, he said.

“However, the government did not pay despite the Fund’s effort to make a follow-up,” he noted.

He explained that the second actuarial valuation was conducted in 2007 after the Fund started paying benefits. In that valuation it was noted that the financial position of the scheme had deteriorated further mainly due to non-repayment of liabilities in respect of the pre-July 1999 actuarial deficit, this time reaching 3.3trn/-.

Mayingu said PSPF’s board of trustees tabled the report of the second actuarial valuation to the government, the defunct Public Corporations Accounting Committee (POAC), for action after which the Controller and Auditor General and the Social Security Regulatory Authority (SSRA) to verify authenticity of the liability.

According to Mayingu, the third actuarial valuation was conducted in 2010. In this valuation SSRA and the Bank of Tanzania (BoT) undertook the task to establish an independence of the results after which it was established that the Fund’s financial situation had further deteriorated with the liability reaching 6.4trn/-.

The third actuarial valuation observed that the Fund was 10.1 percent funded compared to 43.9 percent in 2007.

Mayingu said that the non-repayment of the liabilities has been a challenge to the scheme as it increases its financial burden.

He said several government entities borrowed from the Fund under government guarantee but such entities have failed to honour their commitments.

Minister Mbene responding acknowledged the debt the government owed PSPF, stating that in the 2013/2014 financial year a total of 50bn/- would be paid to the Fund.

PAC ordered the government, SSRA and PSPF to ensure the allocated 50bn/- is paid to PSPF and report back to it in a week’s time.

Uhuru unveils new Cabinet

Former Barclays Kenya CEO Adan Abdalla Mohamed who is the nominee for Cabinet Secretary of Industrialization 

President Uhuru Kenyatta has announced 12 additional nominees for Cabinet positions that included the surprise return of politicians defeated in the just ended general election.

Former Minister Charity Ngilu and Najib Balala were named as Cabinet Secretary nominees for Lands and Mining respectively.

The list also had the surprise inclusion of Raychelle Awuor Omamo as the nominee for Defence.

To ensure a smooth transition, President Kenyatta also named current Head of Public Service Mr Francis Kimemia as Secretary to Cabinet and former Development of Northern Kenya and other Arid Lands Permanent Secretary Lawrence Lenayapa as State House Comptroller.

Fielding questions from journalists on the nominations, President Kenyatta said the remaining two Cabinet Secretary nominees will be known in due course.

On nomination of former legislators Ngilu and Balala, the President said the two will have to relinquish all political positions and team up with other Cabinet Secretaries to deliver on the Jubilee government development agenda for the country.

He said the Cabinet nominees reflected diverse faces of the nation and maintained gender parity and regional balance.

Here is a list of the full Cabinet:

1. Fred Matiang'i (Information, Communication and Technology (ICT),
2. Henry K. Rotich (The National Treasury)
3. James Wainaina Macharia (Health)
4. Amb Amina Mohamed (Foreign Affairs)
5. Adan Mohammed (Industrialisation)
6. Ann Waiguru (Devolution and Planning)
7. Davis Chirchir (Energy and Petroleum)
8. Amb. Raychelle Omamo (Defence)
9. Eng. Michael Kamau (Transport and Infrastructure)
10. Phyllis Chepkosgey (East African affairs, Commerce and Tourism)
11. Prof. Jacob Kaimenyi (Education)
12. Felix Kosgey (Agriculture, Livestock and Fisheries)
13. Prof. Judy Wakhungu (Environment Water and Natural Resources)
14. Dr. Hassan Wario (Sports, Culture and Arts)
15. Najib Balala (Mining)
16. Charity Ngilu (Lands, Housing and Urban Development)
17. Ministry of Labour, Social Security and Services (Vacant)
18. Ministry of Interior and Coordination of National Government (Vacant)

12:04pm: Uhuru Kenyatta: The first task we shall set is to ensure that each of them comes up with a clear way as to how women and young are going to be mainstreamed in every ministry. There will be youth and women involved in every level of decision making.

12:02pm: Uhuru Kenyatta: I believe that we are a nation of equal opportunities. Ambassador Omamo has a wide experience in the diplomatic circles.

12:00: Uhuru Kenyatta: We have taken care to ensure we have reached all corners of the republic, to maintain gender balance. Its not possible to say that everybody will be able to be captured. The objective is to serve 40 m Kenyans in the best way we can.

11:59am: Uhuru Kenyatta: Our two colleagues (Balala and Ngilu) who stood with us during campaigns are not politicians and we have agreed with them that they will resign from all political positions and they will not involve themselves in politics.

11:58am: Uhuru Kenyatta: Yes, there are still two vacancies. We hope to fill them soon. We now want Parliament to start its role of vetting our list.

11:54am: Uhuru Kenyatta: In order to ensure a smooth transition, we will propose Francis Kimemia as Secretary to the Cabinet. I have also appointed Lawrence Lenayapa as State House Comptroller.

11:51am: Uhuru Kenyatta: Our next nominee is Honourable Charity Ngilu. She was first elected to Parliament in 1992. She is our nominee for Cabinet Secretary Land, Housing and Urban Development.

11:47am: Uhuru Kenyatta: Our next nominee is Najib Balala. He was first elected to Parliament in 2002. He is our nominee for Cabinet Secretary Mining.

11:47am: Uhuru Kenyatta: Next is Dr Hassan Wario. He was born in 1970 and hails from Marsabit county. Joined National Museum of Kenya in 1995 and has experience having worked for British Museum. Hassan is nominee for Cabinet Secretary Sports, Culture and Arts.

11:46am: Uhuru Kenyatta: Next is Judy Wakhungu. She is an energy adviser to the World Bank. She is the nominee for Cabinet Secretary Environment, Water and Natural Resources

11:43am; Uhuru Kenyatta: Our next nominee is Felix Kiptarus Kosgey. He is trained in implementing Public, Private partnerships. He is our nominee for Cabinet Secretary Agriculture, Livestock and Fisheries.

11:41am: Uhuru Kenyatta: Next isProf Jacob Kaimenyi Born in 1952. He married with five children. 

Is currently a Vice Chairman at the University of Nairobi. He is the Cabinet Secretary Education

11:38am: Uhuru Kenyatta: The next nominee is Phyllis Chepkosgei Kandie She is married to Ambassador Kandie and are blessed with two children. She is the nominee for Cabinet Secretary East African Affairs, Commerce and Tourism.

11:35am: Uhuru Kenyatta: Next isEngineer Michael S. Kamau. He has been in the civil service since 1981. Has been Permanent Secretary since 2007. He is our nominee for Cabinet Secretary Transport and Infrastructure.

11:33am: Uhuru Kenyatta: The next nominee isAmbassador Raychelle Awuor Omamo. She is a senior counsel and advocate of High Court for 27 years. She was the first female chairman of LSK. She is the nominee for Cabinet Secretary of Defence

11:30am: Uhuru Kenyatta: Our next nominee is Davis Chirchir. He previously served as a Commissioner in IEBC. He co-ordinated privatisation of Telkom Kenya and establishment of Safaricom. He is the nominee for Cabinet Secretary Energy and Petroleum

11:26am: Uhuru Kenyatta: Our next nominee is Anne Waiguru. She has specialised experience in public finance. She is a proud mother of three sons. She is the nominee for Secretary Devolution and Planning.

11:22am: Uhuru Kenyatta: The first individual Adan Abdalla Mohamed. He was born 1963 in Mandera and was CEO of Barclays Kenya. He worked for PWC in London, he is an MBA graduate in Harvard Business School and has five children. He is the nominee for Secretary of Industrialization.

11:20am: William Ruto: Apologies for delay. The President had some important appointment this morning... the chairperson of AU. Also he had a meeting on matters of the security with the Inspector General of Police.

11:15am: Presidential Press Service officials tell journalists that President Kenyatta's media briefing will start in 10 minutes.

10:55am: Nation reporter Isaac Ongiri says President Kenyatta and his deputy William Ruto are still conducting interviews on potential Cabinet Secretary nominees.

10:30am: State House releases a photo of President Kenyatta meeting African Union Chairperson Nkosazana Dlamini.

10:15am: An hour after the promised 9am deadline, President Kenyatta emerges from State House to bid farewell to the African Union boss Nkosazana Dlamini.

9:30am: President Uhuru Kenyatta and his deputy William Ruto keep Kenyans waiting on the names of their Cabinet Secretary nominees for the second consecutive day.

The two have reneged on their promise to unveil names of the Cabinet nominees by 9am Thursday.

9:00am: State House, Nairobi, the President's official residence, a beehive of activity, with senior government officials being sighted in the precincts.

Attorney General Githu Muigai and Police Inspector General David Kimaiyo are among government officials seen in the area alongside former IEBC Commissioner Davis Chirchir.

Journalists who camped at State House Nairobi on Thursday morning to cover the event were offered tea but with no explanation for the delay.

Television stations on Thursday lack the frenzy that had characterised Wednesday's media briefing by the President

Use of EFDs must mean better use of tax revenue By Editor

 

 

 

 

 

 

 

 

 

Editorial Cartoon

The Tanzania Revenue Authority began using electronic fiscal devices (EFDs) in tax assessment and collection three years ago, and it reports having made encouraging headway.

The progress is both in terms of boosting revenue collections and in helping businesses to organise better for enhanced productivity.

Initiatives made towards that end include regular draws introduced for taxpayers, where those eligible to participate can win prizes on the strength of their statutory contributions to government coffers.

On this, TRA deserves kudos for recognising the logic of marching with the times and promoting competition, a proven force behind social and economic development.

Most firms in Tanzania organise competitions of all sorts, chiefly aimed at luring customers to buy their products and services and ultimately earn more income.

Even government departments, autonomous agencies and non-governmental organisations have since seen the logic of engaging in competition as a way of swimming with the current.

We believe that, in the particular case of TRA, the raffle plan will encourage more people to pay tax – and this is why we say the agency has made the right decision at a most opportune time.

More commendations should also go to the TRA management for coming up with an EFD-aided strategy aimed helping other sectors to organise better so as to become more efficient.

TRA has vowed that no stone will be left unturned in its efforts to ensure that all those who ought to pay tax actually pay tax – and the correct amounts at that – and that no businesses will be spared.

We see TRA’s drive as prompted by the perpetual behaviour by many potential taxpayers reneging on that obligation, with some actually refusing to pay tax or refusing to issue receipts or keep proper records, while all this eats into government coffers and therefore sabotages the economy.

For instance, since the agency it intends to cast its net wide enough to cover even the likes of people engaged in commuter bus transportation, what will likely happen when that stage is reached?

The development could be a big relief to passengers in that it will improve services, currently worse than substandard particularly in urban areas like Dar es Salaam.
Secondly, the new system would help the bus owners streamline their businesses in that no revenue would be lost through ticket printing.

Bus owners often do not issue paper receipts or keep paper records simply because of the expenses they would incur if they acted to the contrary.

So, contrary to contrary belief, EFDs can prove a boon even for businesses and not only TRA because the use the devises would enable better management of finances and generally better deals for both service providers and customer – as the nation benefits in process thanks to rises in tax collections.

But then, some all-important questions: can anyone assure taxpayers and the larger public that the hefty amounts TRA collects really serve the nation? Additionally, when will we plug the loopholes facilitating tax evasion and the exclusion of thousands of money-minting businesses so that “perpetual victims” such as salaried workers can also heave well-deserved sighs of relief? 

SOURCE: THE GUARDIAN

TIB plans to finance international market for farmers' products

By Lusekelo Philemon

Adam Malima, Agriculture, Food and Cooperatives, deputy minister,

The Tanzania Investment Bank (TIB) has agreed to finance construction of a modern and international market for agro-related produces in Kasulu District of Kigoma region.

Agriculture, Food and Cooperatives, deputy minister, Adam Malima said here on Monday that the project aims at giving farmers reliable market channels for their produces.

He stated that Kasulu is one of areas in the western part of Tanzania with high production of cash and food crops, but for quite long time farmers had no reliable market outlets thus creating loopholes for middlemen to steal their sweat.

The new market would have modern facilities including banks, internet services, and communication services to enable farmers to get up-to-date market information within and outside Tanzania.

According to Malima, TIB has agreed to contribute 80 percent of the construction cost and Kasulu District Council is to part with the remaining percentage.
He said the market is to be built in an area located between villages of Mgombe and Nyachenda in the district.

“The proposed market will help boost social and economical status of the district as farmers will be able to meet with buyers directly at the market,” Malima said, adding that TIB and Kasulu District Council have already signed a Memorandum of Understanding (MoU). 

SOURCE: THE GUARDIAN

EAC One-Stop-Border Posts bill passed

President Museveni is expected to focus on Monetary Union in his EAC address today. The New Times/ File.

• By James Karuhanga

Members of the East African Legislative Assembly (EALA), currently sitting in Kigali, late Tuesday, passed the long-awaited One-Stop-Border Posts bill, paving the way for it to become an East African Community (EAC) Law if assented to by the five EAC Heads of State.

The bill, initiated by the EAC Council of Ministers, provides the framework for the establishment of One-Stop-Border Posts (OSBP) in the five-nation bloc in order to facilitate trade through free movement of goods and people within the Community.

Rwanda is well positioned to be the Singapore of Africa

AbuBakr Ogle

LAND LOCKED, tiny in area and regarded as more densely populated than any other country in sub-Saharan Africa, Rwanda has at the same time achieved what a leading British development expert; Paul Collier fittingly calls “the hat-trick” of rapid growth, sharp poverty reduction and reduced inequality, within a comparatively short period of time.

A view of Downtown Kigali. Under President Kagame, Rwanda continues to be one of the fastest growing economies in the world. The New Times / T. Kisambira. 

For a country that still harks back to the genocide of 1994, when close to a million people were murdered in the spate of 100 days of sustained mayhem while the world watched, this is no mean achievement.

Even then, I and my colleagues in the East African Legislative Assembly currently conducting our routine rotational Plenary Session in Kigali, continue to marvel at the breathtaking panoramic view of the city, and more specifically, at the cleanliness of every facet of the environment obtaining herein.

Indeed, so much so is the ambiance and orderly life of the city that many of our membership have confided that the Kigali sojourn was a deserved three weeks break from the comparatively unprecedented hazy skies, pollution and traffic snarl-ups that now define a working day in Nairobi, Dar and Kampala.

I will bet that our regional MPs would grudgingly have wished that the sessions ran a little longer, with a tongue-in-cheek suggestion to transfer the planned sittings in other partner states to Kigali, as they rejoice in the morning and evening jogs past carefully cut grass lawns amidst the sweet scent from the fresh flowers, alongside hundreds of locals.

But that alone is not what Rwanda has got to show since its miraculous return from the abyss of history nearly two decades alone. Rwanda’s GDP growth is expected to be in the region of 6.3 per cent this year, while its free health care system already covers about 90 per cent of the population.

The KivuWatt Project, one of Rwanda’s most ambitious projects, is furthermore expected to increase the mountainous country’s power generation by a third. This is a symbol of revival and turning a potential disaster into an engine of growth and reinvigoration.

Coupled with the massive infrastructural developments taking place all across the country and the astute and visionary political leadership that has placed emphasis on the philosophy of “Duharanire Kwigira – Striving for Self-reliance,” Rwanda could be poised as the new Singapore of Africa.

In more than many ways, Rwanda and Singapore share common characteristics. They could variedly be described as economic miracles who have achieved much within a short span of time and in spite of their lack of natural resources. All that the Eastern African state now requires to do is to, like Singapore, exploit further its own strategic entrepot location in the Eastern and Central Africa, as well as the Great Lakes region and orient its local population to embrace the spirit of hard work and unshackle their mindset from the horrendous experience of the yesteryears.

Singapore’s economic leap and massive increase in wealth as one of the four Asian Tigers is premised on sound economic fundamentals, strong regulatory frameworks and an even stronger pro-business environment and diversity. Like the revered Lee Kuan Yew of Singapore, Rwandan President Paul Kagame presently enjoys singular popularity for his personal charisma, no-nonsense approach and a commitment to pursue what he thinks is right for the common good of the country.

Under his benevolent guidance, Rwanda is further capable of attracting regional and international capital and draw on the biggest banking and financial institutions already operating in the East African Community (EAC), for which he is one of its leading cheerleaders.

Apart from banking, there is of course, need to develop more liberal foreign exchange bureaus underpinned by a strong reputation for trust and integrity – in a way intended to scoop a major share in the expected African economic boom. I am hoping that the decay and obtaining economic malaise in Europe would have been aggravated whilst the current excitement over China and India dissipates in the next few years

Again, Singapore roared on to become the world’s fourth leading financial centre, not because it possessed its own enormous wealth, but largely because of its ability to re-export and refine already imported goods. This concept of adding value to raw materials from the neighbouring countries could possibly be harnessed in Rwanda.

During the latest visit by the EALA MPs, we toured a mining site in Muhanga District in the Southern Province where an excited General Manager of the Pyramid Company, Mr Mahmoud Saleh, informed the group that indeed on the insistence of the President, they planned to be a re-packaging facility for all raw minerals in the region. In Nyagatare District in the Eastern Province, the appropriately named East African Industry produces quality granite materials that are already a delight in the region.

Kigali and the immediate outlying areas could also be marketed as the ideal international venue for meetings, conferences, seminars and as the desirable get-away place to work from, reflect, packaged as the ultimate destination in the Eastern Africa region. The diversity of the Rwandan folks transcends the local Kinyarwanda dialect to encompass a commanding grasp of both English and French languages.

Moreover, Rwanda’s determination to develop its telecommunication infrastructure; and its endeavour to wire up every citizen to the information highway, has since made it one of Africa’s top 10 ICT-savvy nations. It will not, therefore, be difficult to create an e-lifestyle amongst the Rwandan population. This will allow everyone from the village level to chat, take lessons, make business and banking transactions, apply for government services or even simply watch a movie on demand.

An extensive connectivity coupled with a pro-business environment and legal and regulatory framework should make Rwanda the ideal e-commerce hub and thus attract the regional and international venue it ought to be in the next decade.

Above all, Rwanda’s relatively corrupt-free and transparent management of public affairs is perhaps the single largest tempting reason after its environmental management policies that should beckon both investors and tourists in equal measure.

The writer is a member of the East African Legislative Assembly from Kenya.

Tz officers visit for Military Medical Insurance study tour

 

UPDF officers check people as they queued up to access the the General Court Martial session at Bombo Health Centre III on Monday. This was during the trial of Pte Patrick Odoki, who is accused of shooting 10 people. PHOTO BY ABUBAKER LUBOWA. 

A team of five military officers from Tanzania Peoples Defence Forces led by Maj. Gen. Dr A S Mwabulanga are in Rwanda to learn from Rwanda Defence Force Military Medical Insurance.

The officers, who are on a two-day study tour, yesterday paid a courtesy call on the Chief of Defence Staff, Lt. Gen. Charles Kayonga, who gave them an overview of the RDF and Rwanda Military Insurance.

The guests visited the Military Medical Insurance (MMI) and Rwanda Military Hospital to have firsthand information on how the Military insurance operates.

Gen. Mwabulanga said the team has been tasked to initiate a military medical insurance in TPDF and that is the reason why they came to Rwanda to get experience from MMI.

 "We are aware that RDF is among few militaries that have Military Insurance on African continent, otherwise we do depend on national health insurance.”

He said that they learned a lot from MMI.

“It covers the majority of the health problems that an individual can suffer from. The contribution by military personnel is very minimal and really it serves a lot that someone can expect. I commend the MMI, and in our case we have learnt a lot from them.”

The MMI Director, Lt. Col. Dr Paul Bitega, said the facility is one of the home-grown solutions the RDF has put in place to ensure good health services for its officers.

He said through MMI services, the military and their dependents can access medical services either in military hospitals or other hospitals in the country.

In many countries, soldiers only access medical services from military hospitals, according to Lt. Col. Dr Bitega.