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24.06.2003 Business & Finance

SSNIT Is Unaware That It's Broke

By Public Agenda
SSNIT  Is Unaware That It's Broke
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The government and the Social Security Insurance and National Insurance Trust (SSNIT) are in disagreement over the financial state of the nation’s only social security company.

The source of the disagreement is the Ghana Poverty Reduction Strategy (GPRS) 2003-2005, which has been posted on the IMF website and widely circulated in Ghana.

The GPRS, which was published on February 19, 2003, states on page 37 that the bulk of Ghana’s long-term funds are ‘concentrated in SSNIT, which is in financial disarray.’

The GPRS said SSNIT ‘has many non-performing loans and low return equity investments in insolvent or distressed state-owned enterprises.’ It says as a result of the many non-performing loans, “SSNIT suffers from liquidity problems.”

The GPRS thus recommends that there is need for a thorough review to be conducted with a view to developing and implementing policies for the reform of the country’s social security programme. The GPRS is of the view that macroeconomic stabilization along with a reduction of domestic debts will help lower interest rates and create incentives for private investment.

When Public Agenda reached, Osei Bimpong, Public Affairs Director of SSNIT to comment on the GPRS’s assessment of SSNIT, he was surprised at the choice of words in describing the financial state of SSNIT.

Bimpong said SSNIT was neither in ‘financial disarray’ nor facing ‘liquidity’ problems as the GPRS portrays to Ghanaians and the international community. He was worried about the time frame in which the latest data on SNNIT were compiled. He said since the new management took office in the last two years both government and the IMF have not spoken to SNNIT on its financial state.

“If we were in financial disarray, where do we get money to pay pensioners every month?”

Meanwhile SSNIT has announced that 500 serviced plots at Dunkonah on the Cape Coast- Winneba road it acquired from the James Town, Aplaku, Bortianor and Weija Stools are now ready for development. This follows the successful settlement of litigation bordering on the ownership of the land.

Conducting newsmen round the plots last Thursday Bimpong and a team from the estate department of SSNIT said in 1995 the Government of Ghana which initially acquired 586.25 acres released 507.75 to SSNIT. The remaining 79 acres which government reserved as a land bank have been taken by illegal developers. SSNIT subsequently paid ยข1.65 billion to the Lands Commission as compensation to the stools. But SSNIT had hardly completed the first phase of the project when 200 encroachers started putting up unauthorized structures.

Bimpong said the encroachment on the land delayed the project, which was expected to beautify that part of the town. He said not even the intervention of police could stop the annexation of the SSNIT plots. He said so far three estate developers have showed interest to invest in the plots.

So far SSNIT has spent nine million dollars on constructing drains and electricity. Unfortunately criminals have stripped the electric poles of most of the cables.

A tour of the area confirms the fear of investors that land administration in Ghana is characterized by indiscipline and lawlessness. That land guards have guts to wrestle land from a powerful public institution like SSNIT sums up the brutish state of land sales in Ghana.

Armed with a new site plan from the Lands Commission and the backing of the Ministry of Lands and Forestry, SSNIT has given illegal developers up to July1 to make arrangements to start paying for the plots or risk demolision of their structures.

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