The Social Security and National Insurance Trust (SSNIT)’s inability to live up to its mandate is due to excessive interference from government, according to Professor Stephen Adei, a senior economist.
He said the scheme had been over politicized since its establishment, stressing that it might not be able to realize its development potential if the trend does not change.
Prof. Adei, the immediate-past Rector of the Ghana Institute of Management and Public Administration (GIMPA), told senior staff members of SSNIT at the 5th Quadrennial Congress at Sogakope that “one of the banes of the scheme has been the level of political interference of successive administrations of the scheme.”
Prof. Adei cited the composition of the board of trustees of SSNIT which he said was weighed in favour of government.
He explained that the board has “significant share of members being government representatives with high influence on decision, assuming that even the others are representatives of their constituencies.”
He said “this opens wide the door for the government of a country to influence the operations of SSNIT greatly”, adding that the operations had suffered from attempts by various governments to politically influence key appointments and investments decisions.
Commenting on the appointment of managing directors, Prof Adei observed that “no wonder even chief executives have come and gone with each regime over the years.”
This, according to him, “has resulted in channeling of a lot of investment into government securities, low performing portfolio of investment and financial albatrosses such as student’s loans scheme, not to mention the government being one of the miserable offenders when it comes to paying employers contributors to SSNIT.”
Apart from governments’ intervention, Prof. Adei mentioned that other challenges of the scheme include its structure and form of operation.
“It is quiet clear that the rate of return on total investment of SSNIT has been lackluster over the years and paltry in terms of real returns.”
The scheme, he said, was suffering the “national canker of doing things in style using four wheel drives where motorbikes will do.”
Structurally, he said, the pay–as you-go arrangement of the scheme made it impossible to cover all Ghanaians in their old age.
He said the scheme’s coverage remains small since it would still not have covered more than 20 per cent of Ghanaians until “we reached an advanced economy state where majority of people will be in the modern sector.”
This, he said, could explain why the scheme has had limited impact on the national growth, financing of infrastructural development and impact on national savings, as well as the development of national financial markets.
He however commended the current management and trustees for making improvement in recent years “for your operations, courage and boldness to tackle some challenges which is giving the impression to many contributors that they are not being short-changed.”
Notwithstanding, he was of the opinion that SSNIT could have been more proactive and creative over the years.
SSNIT, he said, should have introduced much innovation and pioneered the reform of pensions enacted in 2008.
Pix saved as Prof Adei in Buz
Prof Stephen Adei