8 October 2008
Maputo — Despite the various scandals associated with Mozambique's National Social Security Institute (INSS), it is growing and is in good financial health, Labour Minister Helena Taipo told the country's parliament, the Assembly of the Republic, on Wednesday.
She was responding to a request from the parliamentary group of the Renamo-Electoral Union opposition coalition for information on the management of the INSS. Evidently Renamo wanted to hear about the corruption charges made by Labour Ministry inspectors, and the subsequent audit - but instead Taipo gave them an upbeat assessment of the INSS's growth and stability.
She said that the number of companies and institutions registered with the INSS had grown from 16,000 in 2004 to 24,000 in 2008. There were now 713,000 workers who could potentially receive benefits from the INSS - a 31 per cent increase ion the 2004 figure.
Taipo thought there was a growing commitment by employers to ensure that their workers were covered by social security. But there had also been increased activity by courts and prosecutors to take action against employers who failed to channel workers' social security contributions to the INSS.
Over the past four years, INSS total revenue was 4.4 billion meticais (about 183 million US dollars). Revenue had been growing at an average rate of 23 per cent a year, from 634 million meticais in 2004 to a projected figure of 1.8 billion meticais this year. 85 per cent of the income was the contributions from employers and workers, with the rest coming from investments, interest on deposit accounts, and rents on buildings owned by the INSS.
Total INSS expenditure over the four year period, Taipo said, was 3.4 billion meticais, which meant there was "a positive and encouraging financial balance".
25,000 people were now receiving pensions from the INSS, she said. The minimum pension had risen by an average of 14 per cent a year between 2005 and 2007, but rose by 30 per cent this year, thanks to a significant rise in the minimum wage. Nonetheless, the minimum pension is still only 1,284 meticais (about 53 US dollars) a month.
Taipo said that, as part of the public sector reform, as from 2005 INSS procedures had been simplified, and measures taken to improve attendance to beneficiaries. One of the most significant was an immediate payment of funeral expenses, replacing a previous wait of 30 days.
She did not go into detail about the corruption uncovered earlier this year, and merely added that a through audit if the INSS by the General Inspectorate of Finance is now under way. She insisted that the government is committed to a strong and sustainable social security system that "can meet its obligations over the medium and long term".
Renamo only wanted to discuss the INSS corruption scandals, not the overall health of the institution. When Renamo deputy Antonio Muchanga listed the corrupt practices in the INSS, members of the ruling Frelimo Party accused him of "spreading gossip", "unfounded speculation", and "disinformation".
But much of what Muchanga said came straight from a report by a Labour Ministry Commission of Inquiry made public at a press conference in June. It was not any Renamo member, but the Ministry's director of planning and statistics, Paulino Muthombene, who accused the former management of the INSS of "smart corruption".
Among the crimes uncovered by the commission were over-invoicing, double payments, the charging of illicit commissions, and manipulation of tenders. Muchanga was merely echoing Muthombene when he said that INSS managers had preferred directed tenders rather than public ones, sometimes faked tenders, or simply awarded contracts without any tender at all.
The claim that the INSS paid twice for the same work on its delegation in Tete province is not a Renamo fabrication. Illustrating the forms of corruption the commission had discovered, Muthombene said in June that there had been two payments to the same company, Dora Consultores. The first payment was made in May 2004, to the value of 281.300 meticais (11,700 US dollars), and the second was on 26 September 2006 for 601,800 meticais (22,900 US dollars).
"The first and the second payments are for the same invoice, with the same number, date and content, and the only difference is the amount. All leads one to think that this was intentional, and it is a real fraud", said Muthombene.
But the INSS also paid a second company, Arcus Consultores, over 387,000 meticais for the same work, also in September 2006. "Why two payments in the space of thirteen days?", asked Muthombene. "How many INSS delegations are there in Tete?"
Similar fraudulent situations were found in payments for building INSS delegations in Gaza, Zambezia, and Nampula, and in the building of low cost housing schemes in Maputo, Beira and Nampula. In the latter case, the work had been budgeted at 45,000 US dollars each, but each scheme ended up costing 100,000 dollars.
Some of Muchanga's other complaints, however, made little sense. He objected to the INSS investing in Mozambican banks. One of these investments went sour when the bank in question, Credicoop, collapsed. But, in principle, an organisation such as the INSS cannot put its revenue under the mattress, but has to invest it in companies that it thinks will make a profit.
Speaking to reporters, Prime Minister Luisa Diogo said the INSS receives independent advice on investments. She added, however, that the investment portfolio must be permanently reviewed, to ensure that the contributions received from employers and workers are being used in the most rational manner.
Renamo deputy Ismael Mussa asked Taipo to present a list of INSS investments, and inform deputies which ones paid dividends. He also claimed that companies occupying buildings owned by the INSS were paying very low rents, which is some cases would not even cover maintenance costs.
Taipo is due to reply to the debate on Thursday.
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