Tinashe Makichi
THE National Social Security Authority (NSSA), has started consolidating its investment turnaround through venturing into mining and mineral beneficiation.
The controversies surrounding investments by NSSA’s previous board, under the management of Mr James Matiza, has been under scrutiny for some time.
NSSA is, however, now reaping dividends of portfolio restructuring instituted by the current board, which was appointed in October 2015.
The lucrative mining sector is the next frontier for NSSA as it continues refocusing its investment portfolio targeting performing assets and strategic national projects.
With existing equity holdings in Bindura Nickel Corporation and Hwange Colliery Company, NSSA is looking at expanding its footprint in the emergent sector, which is seen driving long-term economic growth.
NSSA general manager Liz Chitiga, said the pension fund is considering mining investments worth $80 million in precious metals, gold and platinum, the nascent lithium sector and coal.
“We are looking at opportunities across the entire mining value chain including extraction, value addition and beneficiation, in line with Government policy and development of downstream industries.
“With its foreign currency earning potential and employment generation capacity, the mining sector is a compelling case for us to consider. The long term gestation period for mining projects is also in sync with the pension fund liabilities for the authority,” she said.
The authority is also looking into equity and quasi-equity transactions for development of infrastructure that supports mining activities.
NSSA has also taken up an 80 percent stake in the Cold Storage Company, with a view to restoring the erstwhile beef exporter to its former glory and anchor for the livestock value chain.
At least $20 million dollars is earmarked for the recapitalisation.
The strategy has resulted in 119 percent growth in investment income, from $22,755,000 when the current Board took over to $49,861,000 in 2017.
Total Assets under management also increased by 49 percent to $1,297 billion during the same period.
Despite the turnaround, the authority is still haunted by a string of delinquent investments made prior to 2015, which were unearthed in an adverse forensic audit that was initiated by the current Board.
“From the onset the current Board and Management wanted to establish the full extent of the historical losses and that’s why the forensic audit was undertaken,“ Mrs Chitiga said.
“The failures are well documented and continue to be widely reported but they are in the past, behind us. Going forward we should be judged by the performance we have achieved since we came into office.”
Pensioners have been direct beneficiaries of the improved performance. She said 2017 saw minimum pension payouts go up to $80 and a 13th cheque paid to all pensioners for the first time ever.
The previous board has been involved in a number of controversial investments. What was sad is the seemingly wanton investment decisions that the authority is undertaking, risking the pension benefits of the retirees and those still in employment.
As a matter of fact, NSSA has investments directly or indirectly in almost every Zimbabwean bank, itself being testimony to its centrality in solving the domestic investment dearth and consequentially the liquidity crisis affecting the economy.
For lack of a better phrase, the investments that have been done by NSSA so far are a reflection of the lack of financial and econometric depth from their investment board.
For instance even when the signs were there to see on the eve of the collapse of Interfin Bank, the authority blindly continued to do money market placements. It was clearly indicative that the potential loss in Interfin Bank alone was over $19 million.
NSSA gave Capital Bank the nod to wind up operations to focus on setting up a micro-finance institution, a move that was greatly opposed by economic analysts.