Pay Sh225bn debt arrears to NSSF within one week: govt

Dar es Salaam. The government has issued a seven-day ultimatum to all government agencies, ministries, individuals and private companies to pay their outstanding arrears to the National Social Security Fund (NSSF), amid reports that the fund owes a total of Sh225 billion to various debtors.

The NSSF director general, Prof Godius Kahyarara told the minister of State in the Prime Minister’s Office (Policy, Parliament, Labour, Employment, Youth and the Disabled), Ms Jenista Mhagama, here on Sunday that various public institutions, corporate bodies and individuals owe the fund a total of Sh225 billion in unpaid dues.

“Some individuals as well as government and private institutions that had taken loans or/and bought houses are yet to settle their dues….These people owe a total of Sh20 billion and $1.2 million (about Sh2.6 billion on the prevailing exchange rate) in unpaid dues,” he told Ms Mhagama said after touring the NSSF’s Kigamboni housing project in the city. According to Prof Kahyarara, employers are yet to pay a total of Sh86 billion which is part of their employees’ statutory contributions and penalties.

Other debts include Sh42 million and $35.9 million (about Sh78 billion on the prevailing exchange rate) respectively that were provided as loans to various private sector bodies. NSSF has also provided Sh38 billion loans to savings and credit cooperative societies which are also yet to be recovered.

In response, Ms Mhagama directed the board of trustees of all pension funds to ensure that all debtors pay their outstanding debts immediately and enable pension funds to provide services to retirees. “I know that contracts were signed by both parties prior to the loan issuance. We now need to follow the same contracts and ensure that all loans are repaid,” Ms Mhagama said. She directed the permanent secretary in her ministry, Mr Erick Shitindi, to ensure that the management of all pension funds should issue a report on the steps taken against those who will have defaulted or failed to repay the loans on time.

In the same vein, Ms Mhagama tasked the chairman of the NSSF board of trustees, Prof Samuel Wangwe, to submit a report to her office regarding the progress in debt collection.

“Let’s ensure that all people have not paid their debts to pension funds – irrespective of their titles in the community – do pay their debts…This should include private companies, investors and government institutions,’’ she said.

Prof Kahyarara, however, said the fund had already started taking steps in line with legal requirements.

“Following the loans, we fund have issued evection notice to loan defaulters but some of them went to court to seek an injunction. The court was expected to issue ruling yesterday (Monday),” he said.