The NDC Minority in Parliament has said the statement by the Director General of SSNIT that the proposed transfer of 2.5% contribution to the national health insurance scheme would not affect pension benefits, was extracted “under duress” and was calculated to throw dust into the eyes of workers.
The Minority recalled that it was the same Director General who briefed the house joint committee on health and finance at a workshop at Swedru and stated that actuarial studies had revealed that the deduction of the 2.5% of workers’ pension contribution to the health insurance scheme would reduce the viability of the fund from 50 years to 25 years.
“Clearly since Swedru and now, the Director General has come under pressure to come out to support Government’s appropriation of workers pension contribution”, the Minority said in a comment on the SSNIT statement issued at the weekend. Minority Spokesman on Finance, Moses Asaga said it is clear from the SSNIT statement that workers’ pension benefits will be affected by the deduction.
He also said government’s indecent faith to pass the bill is to meet a deadline with the International Monetary Fund (IMF).
He said: “An IMF/ World Bank delegation is expected in the country in September to appraise Ghana’s progress under the Ghana poverty reduction strategy and the 2.5% vat contained in the Insurance Bill is one of the conditionalities Ghana must meet to qualify for the release of fund under the poverty reduction growth facility (PRGS).
“Government is therefore willing to sacrifice the required due diligence of putting in place an efficient NHIS on the alter of meeting IMF/World bank conditionalities.”
The minority predicted that if government goes ahead and forces through the NHIS it would create chaos in the health sector and jeopardize further access of ordinary Ghanaians to quality healthcare.
Mr. Asaga noted that the SSNIT statement admits on page three that the viability of SSNIT will be severely affected by the 2.5% deduction if a comprehensive review of the basic design of the SSNIT Scheme is not carried out.
He explained that the management of SSNIT in a presentation to the joint parliamentary committee last month indicated that the solvency of SSNIT would reduce from 50 years to 20 years. This position, he said, cannot change overnight.
He said the current SSNIT assets to liability ratio of 35% which the minister quoted implies that liabilities of the SSNIT fund exceeds the assets which is true for most social security schemes all over the world.
He further said that removing 2.5 of 17.5 percent of contribution to support the national health insurance scheme will further widen the gap and therefore the assets to liability ratio will rather decrease and not increase to 47% as declared by the minister assuming everything remains constant.
Mr. Asaga said the ministry of finance is prescribing risk free but high yield on investments but by government policies interest rates are supposed to be reduced to 20-25% to reduce cost of borrowing. By that token, it means that yields on SSNIT investment in treasury bills will decrease from a previous high rate of 36% to 20% meaning that government policy on interest rates is at variance to the investment policy of SSNIT.
He questioned how administrative cost could be reduced when it is a market value cost. Is SSNIT going to reduce staff benefits on health or reduce cost? Or are they going to reduce the cost of fuel, which was increased by 95%and captured in the 2003 budget.
The minority spokesman said inflation is currently 29% with prices of goods and services reflecting the inflationary position. Another 2.5% increase in VAT will send VAT to 15%, which will escalate prices by 20%. How then will SSNIT reduce administrative costs?
He called on the SSNIT management to come out and demonstrate to Ghanaians the new ways and prudent investments that they have discovered and which did not exist previously and also how the new investment portfolio is going to look like for a rate of investment return of about 8% as quoted by the deputy minister.
He said it is unfortunate that SSNIT has become an unwilling accomplice to this gross disservice to the people of Ghana.