Social Security Fund Reaches Critical Mark

THE Zanzibar Social Security Fund (ZSSF) accumulated fund (net assets) grew by a quarter, to Tsh177 billion, during the year that ended on June 30, 2014 – up from Tsh141.63 billion in 2013. This indicates that the Fund is about to click Tsh200 billion mark!

The tremendous increase of the Fund in a single year was the result of increases in both contributions and investment income.

ZSSF was established under Section 4 of the Zanzibar Social Security Fund Act 1998 and re-enacted under section 4(1) of the ZSSF Act 2005 with the objective of providing social security to all eligible employees.

The Fund’s Managing Director, Abdulwakil Hafidh, says the Fund continues to invest in different portfolios such as Treasury Bills and Bonds, Government Stocks, fixed-term bank deposits, equity investments, call accounts, institutional loans, syndicated loans and in real estate.

He said that ZSSF has a total of Tsh65.96 billion currently invested in fixed term deposits, while a total of Tsh33.3 billion is invested

in Treasury bonds.

He also mentioned that a total of Tsh11.5 billion has been put in equity Investments which include TAN-RE, TPCC, UTT, CRDB and NMB.

During the period under review, overall performance of the Fund continued to meet with its corporate objectives/targets – including registration, collection of contributions, investing and payment of benefits to its members.

The Fund has captured the informal sector membership, which involves a large group of self-employed persons through Zanzibar Voluntary Social Security Scheme (ZVSSS) as its supplementary scheme.

According to the Managing Director, the Fund increased its membership size to 72,210 members reported in the year to June 30, 2014, rising from 66,488 members reported in the year to June 30, 2013. This represents an increase of seven per cent in a single year!

The total number of registered employers increased to 1,200, up from 1,091 in the period under review.

There was also an increase in contributory collections, rising from Tsh24.8bn in 2013 to Tsh29.1bn in the year which ended June 30, 2014.

The Chief Executive mentioned that, during the period under review, there was an increase in income from investments that were held by ZSSF.

“This investment income increased to Tsh146.0 billion in the year to June 30, 2014, up from the Tsh126.3 billion registered in the year to June 30, 2013: an increase of 15.66 per cent. This increase was largely due to appreciation of share values in the different institutions in which the Fund has invested, as well as increased interest rates in the money markets,” Hafidh said.

During  the review period, the total amount paid by the Fund to its members in the form of various benefits increased by 53.67 per cent.

The benefits increased to Tsh9.9 billion in the year which ended on June 30, 2014 – up from Tsh6.5 billion in the year to June 30, 2013.

The increase in benefit payments was a result of new retirees and foreigners who left the country.

Hafidh noted that, despite the achievements made by ZSSS during the year 2013/2014, the Fund has been facing a number of challenges. These include depreciation of the Tanzania Shilling, taxes on Fund’s income – both of which hinder our efforts at increasing financial sustainability of the scheme, insufficient investment opportunities and low returns on real estate.

“Also, on account of these challenges, the Fund will continue finding new investment areas; implementation of five years ICT Strategic Master Plan in order to improve efficiency and effectiveness of our daily activities; enhance risk management procedures, and use the social media to simplify communications”, the Managing Director strategized.

Corporate Social Responsibility (CSR) has been one of ZSSF’s undertakings since 1998. The Fund continued to invest in the community with the aim of improving the quality of life of the people at large.

During the period under review (2013/2014), the Fund engaged in various social projects in health, education and community development.