8 August 2012

Tanzania: MPs Worried Over Unpaid Loans

Dodoma — SOME Members of Parliament questioned the government over the repayment of money borrowed from social security funds and invested in long term projects.

However other legislators defended the government's move of borrowing funds from social security funds to invest in developmental projects that benefit all Tanzanians.

The Opposition Spokesperson on Labour and Employment, Ms Cecelia Peraso (Special Seats - Chadema), said the Controller and Auditor General's report shows that a lot of money borrowed from social security funds by government has been invested in development projects that do not benefit members of the pension funds.

She noted that the CAG's report shows that the National Social Security Fund (NSSF) has not entered into any contract with the government over the second phase construction of the University of Dodoma, despite putting in 234.054bn/-.

"Despite entering into a contract with the government for construction of the first phase of the University of Dodoma and investing 35.218bn/-, and the fact that the building is being utilized, NSSF has not started receiving rent fees or payment of money invested," she explained.

She noted that the CAG's report blames the government for going against agreements. She noted that NSSF was supposed to get 15 per cent interest on the loan per year for 15 years and rent fee which would be the cost of investment.

Ms Peraso said other social security funds also invested billions in the construction of the University of Dodoma but have not received payments yet, according to the CAG's report of 2010/2011. These are Parastatal Pension Fund (PPF) 39.987bn/-, Public Service Pension Fund (PSPF) 105.921 bn/-, Local Authority Pendion Fund (LAPF) 22.030bn/- and National Health Insurance Fund (NHIF) 13.403bn/-, Ms Peraso noted adding that a total of 450.615bn/- funds belonging to members of the pension funds were invested in the construction of UDOM.

"According to the CAG's report the investments supplied by the social security funds at the University of Dodoma are non performing, they do no return on investment," she added.

She said other investment projects that utilized social security funds include the National Assembly building, adding that by December 2011 NSSF had not been paid 8.96bn/- and PPF 7.9bn/-. "According to the CAG's report as of 30th June last year, LAPF had contributed 2.91bn/- to the construction of the parliament building," she said.

She noted that the CAG's report also reported that NSSF spent 20bn/- in the construction of police residential housing for an interest rate of 15 per cent. "Payment of the loan plus the interest was supposed start after one year, however according to the CAG's report the pension fund has not started collecting the money, despite the houses being occupied. The report also noted that NSSF did not enter into any contract with the government," she noted.

When contributing to the Ministry of Labour and Employment budget estimates, Ms Jenista Mhagamo (Peramiho - CCM) said the investment using fund from the social security fund is something to be proud of and the government should not be blamed for bringing development to its people.

"I commend the social security funds for investing in developmental projects that are now benefiting all Tanzanians, as we can now see," she added. Ms Subira Mgalu (Special Seats - CCM) who is also the Muheza District Commissioner (DC) came out strongly defending the government and the social security funds for investing in projects that are now the epitome of the nation.

Ms Mgalu cited the University of Dodoma which is now benefitting students from all over the country, a university that has no rival in the whole of East and Central Africa. She noted that the government loans taken from the pension funds by the government will eventually be paid back, adding that the Opposition camp should not blame the government or the pension funds for bringing development to the public.

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