News Column

NSSA's Investments Include Infrastructural Development

June 24, 2014

There were calls at the recent Zimbabwe Association of Pension Funds congress in Victoria Falls for pension funds to invest in infrastructure and infrastructure development. This is hardly surprising given the current state of Zimbabwe's infrastructure and the importance of sound infrastructure for the country's economic development and the fact that, by their nature, pension funds have significant sums that they are able to invest.

Of course, a pension fund's primary motivation for investing is to grow the fund for the benefit of future pensioners and other beneficiaries. There must, therefore, be mechanisms for pension fund investments to yield a return that benefits the fund and its existing and future beneficiaries.

Areas that were suggested for possible investment included agriculture and electricity. One way in which this could happen would be through the issue of interest bearing bonds to raise funds for these sectors that pension funds could invest in.

Recently Finance and Economic Development Minister Patrick Chinamasa said he would give prescribed asset status to funds that were being channelled towards infrastructure development.

Highlighting the fact that insurance companies and pension funds were capable of harnessing funds for critical infrastructure development, he said he would like to see such funds going towards infrastructure developments such as housing and small hydro projects.

The National Social Security Authority, which administers the national pension scheme, has been investing in infrastructure from within a few years of the scheme's inception.

Its first infrastructure investments were in housing. Initially it made the money available for housing schemes through building societies.

In this way it financed the construction of houses for BHP staff in Chegutu and housing projects in Shamva, Norton, Harare's Kuwadzana suburb, Cowdray Park in Bulawayo, as well as Woodlands town houses in Bulawayo. Altogether it financed the construction of 4 654 houses in this way.

Between 2001 and 2002 NSSA carried out some studies on housing development which led to a decision to become more directly involved in housing projects.

As a result of this decision it purchased land for housing around the country and became directly involved in the servicing of housing stands and, in some cases, the construction of some houses. It serviced 699 stands in Marondera's Rusike suburb, on 204 of which it built houses. In Glaudina, on the outskirts of Harare, it serviced 491 residential stands, most of which were medium density stands. This was completed towards the end of last year. Provision was also made for commercial stands, a school and a church, as well as flats.

In the second phase of the Glaudina project, NSSA intends to service 1 600 high density stands. It is currently about to begin servicing 683 residential stands in Runyararo West in Masvingo. It has provided the local authority with a loan for construction of the off-site infrastructure that needs to be in place before it can begin servicing the stands.

NSSA has also constructed shopping malls in Gwanda and Mutare's Sakubva suburb and a business centre in Bindura. It plans to build a similar centre in Chipinge.

It constructed the South Medical Hospital in Chitungwiza and the Ekusileni Medical Centre in Bulawayo. SouthMed Hospital, which is the only private hospital in Chitungwiza, is a thriving institution.

Ekusileni has the potential to provide specialist medical services but is not yet operational.

At the turn of the century NSSA constructed Biri Dam, in Mashonaland West, 20km south of the provincial capital, Chinhoyi, to provide water for both large-scale and small-scale farmers. It intends to build a multi-storey office complex and shopping mall in Harare on the site of the former Ximex Mall, which is currently being demolished.

In Beitbridge, it constructed the new Rainbow Beitbridge Hotel as part of a Government plan to improve the infrastructure in Beitbridge in order to make it a more substantial and more attractive town, since it is the gateway to Zimbabwe from South Africa.

Investment in infrastructure intended to benefit the nation, various communities and members of the pension fund is something which NSSA has been doing on an on-going basis.

Where housing is concerned it has a long-term plan for the development of housing schemes on various pieces of land it has acquired for that purpose since it cannot develop all of the schemes at the same time and it also requires off-site infrastructure to be in place before it can begin to service stands.

Talking Social Security is published weekly by the National Social Security Authority as a public service. There is also a weekly radio programme on social security, PaMheponeNssa/Emoyeni le NSSA, at 6.50pm every Thursday on Radio Zimbabwe and Friday on National FM. Readers can e-mail issues they would like dealt with in this column to or text them to 0772-307913. Those with individual queries should contact their local NSSA office or telephone NSSA on (04) 706523/5, 706545/9, or 799030/1.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: AllAfrica

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