The Sunday Mail
Business Reporters
Appoints Ruwende as investment expert
To report regularly on performance
Many have questioned NSSA’s rationale of replacing a property with a car park in the CBD – Ximex Mall was owned by NSSA and reports suggest a state-of-the-art mall will be constructed there soon — Picture: Prudence Mpofu
THE National Social Security Authority (NSSA), which is currently in the throes of a major restructuring exercise, has signed retrenchment agreements with four of the five directors who were jettisoned from the Authority in October last year for alleged gross mismanagement, raising hopes that the institution in now charting a new course.
NSSA’s new board – appointed on July 7, 2015 by the Minister of Public Service, Labour and Social, Ms Prisca Mupfumira, to sweep the Authority clean – last year wielded the axe on managing director Mr James Matiza; finance director, Mr Patrick Mapani; corporate services director, Mr Tendai Mafunda; and ICT director Mr Bright Chidyagwai.
The package that the fired directors will get was unclear by last week.
Board chairman Mr Robin Vela told The Sunday Mail Business that it was not possible to conclude a retrenchment agreement with one of the directors since he is reportedly out of the country.
He also indicated that the affected former directors will repay the NSSA loans they currently hold.
“In the meantime, we have reached and signed retrenchment agreements with four of the five senior managers (the remain(ing) one having been out of the country) that were relieved of their duties in October last year, the result being a net repayment to NSSA relating to loans held by the individuals,” said Mr Vela.
Though a report that was compiled by the National Economic Conduct Inspectorate (NECI) in the two-year period spanning from February 2009 to December 2010 largely accused the former directors of prejudicing the Authority of more than $5 million through sloppy procurement processes, inflated property purchases and investments in moribund companies, it also discovered that the recruitment and appointment of the said directors was also controversial.
NECI is a department under the Ministry of Finance and Economic Development that is mainly mandated to investigate white collar crimes in both the private and the public sector.
There were disturbing allegations that the recruitment particularly of Mr Mapani (finance), Mafunda (corporate services), Rodgers Dhliwayo (occupational health and safety) and Mr Barnabas Matongera (contributions and compliance) were done on tribal lines as they all came from Manicaland where NSSA’s ex-general manager hails from.
The four executives, who were recruited by High Post Consultants, which is owned by Mr Patrick Chingoka, were part of the seven key directors that were appointed during the review period.
Investigations by NECI concluded that even though allegations of regionalism and tribalism could not be proved beyond reasonable doubt “the coincidence that individuals whose homes are as close to the general manager are getting higher posts raises eyebrows”.
The manner in which the recruitment process was conducted was also interrogated.
Perhaps the most controversial decision taken by the Authority was to hire Mr Patrick Mapani as the director of finance irrespective of the fact that he came in second after Mr Tendai Mafunda during the interview.
Then board chairman Mr David Govere recommended that Mr Mafunda be interviewed for the director of corporate services post that he never applied for.
But the new board is now re-jigging the institution in order to ensure that it doesn’t continue to haemorrhage resources by making questionable investments that do not generate a return on investment.
NSSA will also soon join the bandwagon of state entities that are beginning to report their financial performance to the public.
An independent investment expert Mr Farai Ruwende has since been roped in.
Mr Ruwende, who holds an MBA from Harvard Business School, is a former partner of Actis, an emerging markets private equity firm that manages more than $7 billion of funds in Africa.
He was also a member of PIC Investment Committee for Africa, a South African pension funds manager that managed more than $100 billion.
Explained Mr Vela last week:
“In October last year the board began a restructuring exercise in order to improve corporate governance, reduce operational costs, improve service delivery, accountability and deliver a higher return on worker’s contributions together with a living pension.
“The changes extend to our investee companies where we have taken measures to reconstitute non-performing boards and demand more from their management.
“Five months in, we are happy with the progress made to date and believe that once fully implemented, the restructuring will result in better investment performance and higher investment income and increased payments to pensioners.
“Ultimately a relationship of trust is built on transparency and accountability. As a Board, we intend to “lay all our cards on the table” and will report regularly on performance and increase the financial disclosures we make, including board and executive remuneration.
“The Board also believes the NSSA investment committee’s competence and integrity should be beyond question – public perception wise but also in actual reality.
“The Board, with the consent of the Minister, in December 2015 appointed an Independent Investment Expert to the committee.”
By planning to increase financial disclosures, including board and executive remuneration, NSSA is deliberately trying to court public confidence.
Increasingly, state entities are gradually beginning to publicly report their financial performance in order to increase transparency.
Government is also working on a framework that will make such disclosures public through the provisions of the Public Sector Governance Bill.
Once the Public Sector Governance Bill is passed into law, the Office of the President and Cabinet will monitor board members and senior executives at parastatals and State enterprises and will examine their assets and business interests to ensure good corporate governance.
It is envisaged that through the new legislative framework, permanent secretaries will be barred from sitting on public boards while directors who fail to declare assets and/ or financial interests will be prosecuted.
Chief executive officers who fail to deliver under set performance standards will also face punitive action.
Senior executives will operate under performance-based contracts that feed into Government’s thoroughly demanding Results-Based Management System.
A statutory body that will be created – Public Sector Corporate Governance Delivery Agency – will be created to monitor compliance with the National Code of Corporate Governance (ZimCode).
The agency will superintend a modern public enterprise corporate governance and remuneration framework and will also have powers launch impromptu audits on any public enterprise; approve board appointments and monitor procurement procedures.
The Bill also prescribes two six-year terms for chief executives and compels boards to set salaries, allowances and pension benefits for CEOs and other senior executives in consultation with their respective line ministries.
NSSA’s decision to “open up” its operations comes after a spate of corruption scandals that has plagued the entity.
In China, the abuse of public funds is a cardinal sin that attracts severe penalties.
China’s President Xi Jinping is reputed for launched a brutal campaign against corruption targeting “flies” (junior officials) and “tigers” (top officials) that has condemned senior bureaucrats.
Zimbabwe is also determined to prosecute a sustained fight against the scourge.
