A move by the government to raise National Social and Security Fund (NSSF) monthly contributions should worry Kenyans. Let’s draw attention to how the fund is run. First, the audited accounts for the year ended June 30 speak volumes – the organisation had Sh223 million deposited in the already grounded Chase and Imperial Banks, and only Sh103 million has been recovered so far. NSSF had also invested Sh667 million in a bond offered by the two lenders. In both cases, the amounts were not recovered.
The company let out Hazina Towers in 2010 for 10 years. The tenant defaulted and was evicted in 2019. The subtenants would remove furniture and fittings, leaving the building in a rundown condition.
Regarding Hazina Trade Centre (where Nakumatt Lifestyle was situated), it was found that NSSF still needs to receive value for money for Sh654 million paid to the contractor as idling fees when construction stalled.
The firm had operating costs of Sh5.4 billion, with staff costs of Sh3.8 billion as of June 30, 2020. It spent Sh140 million on security services tenders.
In the 2018/19 financial year, NSSF paid its members an interest of 3%, down from the 12.5% paid in the 2013/14 financial year. A big chunk of money was blown away just like that. So, what is the right way to fix the loss?
Analysts say retirees are better off eating their money than investing it in a public institution rampant with obscene losses. A retiree who gets a 3% interest on their investment should think again. With inflation at over 8%, for example, one will only get a negative return.
A campaign to deduct more money from workers should only take off once the issues clouding NSSF are addressed. Asking workers to pay higher monthly contributions paints a picture of a lamb being fattened for slaughter.