The Efficiency of SSNIT is Questionable

While reading through the news reports of the last three weeks ago, my irritation and frustration with Social Security & National Insurance Trust (SSNIT) has been boiling over, as I tried to digest some aspects of SSNIT's position on defaulters. In the reports starting Friday 2nd September 2005, titled 'SSNIT to Sue Defaulters' a picture is painted of SSNIT the good service provider versus the bad clients. Well, if one undertakes a cursory assessment of the situation, and the amounts owed SSNIT by those institutions / employment agencies, the obvious conclusion would be that the institutions involved are to blame for the state of affairs. Although, no one would defend such behaviors exhibited by those institutions, the question that remains to be answered is whether SSNIT has been diligent enough.

In my opinion, SSNIT's efficiency is questionable because the amounts are so colossal, and an efficient more proactive SSNIT would have been on the ball before the defaulting institutions got this far.

In one of the reports under reference, SSNIT advised workers ….against colluding with their employers to under-declare their salaries……called on employers, who have difficulties in paying their workers contributions to negotiate with the Trust..'

Such a call betrays two limitations of SSNIT's operations. Firstly, that SSNIT has perhaps a limited or no comprehensive educational strategy /agenda to explain policies to uninformed workers in Ghana. Secondly, that perhaps SSNIT lacks clear/unambiguous policies about contributions to the fund and workable strategies for ensuring compliance.

I do not know the facts about the policies and schedules that govern SSNIT's collection of workers' contributions from employers, and this is good reason to be cautious in drawing a definitive conclusion on the issue of efficiency. However, my own frustrating experience with SSNIT in trying to repay my student loan raises questions about the efficiency of SSNIT in dealing with defaulting clients.

I have been trying to repay my student loan for 3 years, and I am angry because the amount keeps growing, and very soon they will accuse me of defaulting. I am not alone in this, as there are many other Ghanaians who have had problems getting their loans sorted out. Some colleagues have even complained of SSNIT staff asking for bribes before processing payment documentation.

While in Ghana from Europe for 4 months, in 2002, I tried to repay my entire student loan. I went to the SSNIT office in Tamale for the relevant information and procedure for repayment. I was surprised to find that the Tamale office was unable to provide me with the statement of money owed, as this information only available in Accra. A promise was made to obtain the relevant information from Accra in about 2- 4 weeks. Initially I was unhappy about having to wait for 2 or 4 long weeks, but little did I know that I would still be waiting after many months. It has been nearly 3 years since and I have not been able to pay my student loan, and no one in SSNIT cares. Why?

Don't be surprised!! SSNIT has perhaps not been able to design a comprehensive payment plan for students because they are not interested in repayment, which is a requisite for creating an efficient and sustainable financial system.

Much as the failure to pay may be mine, I am not surprised that no one has followed-up to inform me of my obligation to pay up. Well, SSNIT has every guarantor in grip, from whom SSNIT can claim the monies at the end of the day. Do these guarantors know what is going on? Are they periodically informed of the risks? SSNIT demonstrating unpardonable inefficiency, and irresponsibility, which is partly to blame for many beneficiaries of the initial student loan scheme being in default.

This strategy of SSNIT to delay and withhold information is not productive, and it is also vicious and irresponsible, because it puts the future of many pensioners at risk. I believe that an institution such as SSNIT, set up primarily to secure the future of pensioners should be doing everything possible to enhance that security, through providing information at reasonable intervals to clients about the state of their future.

In the case of the defaulters of the student loan scheme, one would expect SSNIT to be serious about providing information through any reasonable media to alert guarantors about the risks of recipients not paying-up. On the contrary what we see is a SSNIT that has no system to remind those who have not paid-up to do so, no repayment plan of any sort, and no system to force compliance by those who have not paid –up.

Some may argue that it is a good practice because they have the guarantors, but I find the increased risks put on the guarantors as unfair and irresponsible on the part of SSNIT.

The problem is that SSNIT has no overview of those in default and I sincerely believe that if SSNIT were asked to provide a full list and addresses of defaulting students within 24 hours it would fail. More importantly, there is need for such information to be available at regional branches, which at this stage have to rely on Accra, as if all students across the country come from or would work and live in Accra after their education.

This situation (as personally experienced), is unacceptable and if changes have not already been made, I am challenging SSNIT to do the following:

1. Provide all regional offices with accessible information of all recipients of the student loan scheme.

2. Decentralise the system so that regional offices are able to calculate the interests accruing on individual loans to facilitate the provision of immediate feedback to recipients wanting to payback.

3. Provide an open account to which to loan recipients can pay by installments while checking on the balance of their loans.

4. Provide the current statements of amount owed and the names of their guarantors to all recipients of the student loan scheme.

5. Commence an education program to alert guarantors of those who have not paid-up.

It is my sincere opinion that if SSNIT is unable to put its house in order as far as the student loan scheme is concerned it might be more difficult for SSNIT to ensure that institutions pay workers' contribution towards retirement. The fact that institutions /employers are not paying their workers' contributions is more likely to be the fault of a docile and inefficient SSNIT.