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Government has started reviewing the investment policy framework of the National Social Security Authority to place more emphasis on developmental investments.

The changes are partly in response to the structural shifts in the economy, now dominated by small to medium enterprises, Minister of Public Service, Labour and Social Services Prisca Mupfumira said yesterday.

NSSA also has to invest in projects that are broader with a wide socio-economic impact. The authority, established under an Act of Parliament, has of late been widely criticised for poor investment decisions that have done little to improve the welfare of pensioners.

“They should build a developmental portfolio, which includes infrastructure, housing, medical support, agriculture. Whatever investment they do should be developmental and benefit all stakeholders,” she said.

Without ruling out equities and money market investments, Minister Mupfumira said these were no longer a priority. “Yes they can go on the money market, but does that help the stakeholders?” she questioned.

The minister said she would appoint a new board soon that would drive the new investment policy framework.

Last week, Finance and Economic Development Minister Patrick Chinamasa said pension funds should consider coming up with long-term financial instruments to fund infrastructure development and support industry as well as small to medium enterprises which have become the biggest employer in the economy.

He said pension funds should adopt a long-term view by playing an instrumental role in reviving the economy given the industry’s potential in promoting the country’s sustainable economic development. Minister Chinamasa was addressing more than 300 delegates attending the ZAPF 40th annual congress in Victoria Falls.

“Looking at the life cycle and inter-generational models, I am of the g view that the industry players can play an important role in resuscitating the capital markets, especially for the long dated paper, which is key to infrastructure development and funding for the industry,” said Minister Chinamasa.

“I am humbly urging you to have a re-look at your investment philosophies, because they may be out of sync with reality. There are structural shifts in our economy the small to medium enterprises have emerged as an important sector while big institutions continue to struggle. What are we doing as an industry to support these emerging institutions so that they can graduate into reputable firms?”

The minister said pro-development investments were lacking in the economy as pension funds continue focusing on real estate and equities. He said the funding of infrastructure projects and the industry would have significant multiplier effect. In the same vein, he said there was need for pension funds to revisit their investment allocations.

Source : The Herald

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