For the umpteenth time the management of NSSF has been
hauled before a parliamentary committee.
Parliament wants to probe the NSSF’s investment in Umeme
shares and also alleged irregular recruitments into the fund. For good measure
they asked finance officials for the results of the ongoing recruitment of a
new managing director. Finance officials had the presence of mind to tell the
snoops the process was ongoing and therefore they were unable to speak on the
subject. As if the MPs didn’t know, or did they?
Reports of the proceedings show the probe is in danger of
degenerating into a farce.
Whenever MPs institute a probe I feel sorry for the people
under probe, lament the lost tax payer money that is going to go into it and I
am certain that nothing good comes of these probes, oftentimes the committees
over stretch their mandate, making recommendations allowing for no useful
action to be derived from the whole fanfare.
Of course the drama during the probe makes for good reading,
but little else.
"As a member of the NSSF, looking forward to benefiting from all the savings I have made during my working life, I do not appreciate the MPs unnecessary interest in the Fund...
It would be ok if they knew what they were probing but when
an MP jumps up and criticises the buying into Umeme as risky venture, I really
wonder. All investment is risky. The question when getting into the venture is,
are the perceived benefits large enough to make the investment worthwhile in spite
of the inherent risk.
In fact, I think NSSF and government officials for the
benefit of the MPs, are being simplistic in touting the juicy returns NSSF has
already seen in terms of appreciation and dividend payout. MPs if they knew
anything about investment would be scrutinising NSSF’s investment policy and
the process of choosing investments, because after all, a good investment can
lose money at first and for long periods of time, before showing its real
potential. Ask anyone who bought Safaricom shares in 2008.
This unwarranted scrutiny has the unwanted effect of making
the NSSF management second guess their processes. What will end up happening is
that the Fund’s management will end up piling their money in lower yielding fixed
deposit accounts and government paper just so they fly under parliament’s
radar.
This will be disastrous for the returns that I expect on my
hard earned savings.
Ideally NSSF should be run by us the savers. We should
choose the board, which will choose the management. We own it.
As it is now government oversees the Fund on our behalf. It
is understandable why Government wants in on the action, this is a huge pool of
resources and the political fallout could be massive were the management to
collapse the Fund. They are not necessarily thinking of us.
In an effort to prevent this worst case scenario government
wraps the Fund’s management in so many layers of bureaucratic red tape often to
the point of paralysis.
In the process, just like the MPs incessant sniping, the
eventual returns on my money suffer, if for instance NSSF fails to get in on a
time bound investment because it is having to jump through hoops to get
government approvals.
"Given the current environment whoever heads the Fund will always be operating in less than an ideal environment. It is unfair for us the savers to expect NSSF’s management to show world class returns or for government to expect them to play the transformative role in the economy they are capable. In fact when liberlisation comes around NSSF will be so badly hobbled as to offer little to no real competition to the new private players...
So the unintended consequence of allegedly trying to
safeguard our savings and also not have too much money repatriated abroad will
be to cause loss of the earning power of our savings and send our money abroad
to develop other countries.
The solution is obvious.
Liquidate NSSF, disband the Fund.
Pay the workers what is due to them or if we are so
concerned about the workers’ social security (never mind evidence to the
contrary), parcel out the savings directly to benefit schemes of their choice
and regulate those at arm’s length.
Put us out of our misery, spare us the grandstanding of the
MPs -- who are not savers with NSSF.
Incidentally what’s good for goose is not good for the
gander. While the MPs private provident fund was pigging out on Umeme shares
they think us NSSF savers should not invest in the power distributor. Clearly
they are not raising these objections for our benefit.
