Zimbabwe: NSSA Dismisses Foul Play in Fml Stake Disposal

NSSA building, Harare, Zimbabwe.
17 September 2021

NATIONAL Social Security Authority (NSSA) has dismissed allegations being levelled against it by key stakeholders that there is foul play in the disposal of its 35 % stake in First Mutual Life (FML).

NSSA maintains the deal was done above board.

This comes after the Zimbabwe Congress of Trade Unions (ZCTU) President, Peter Mutasa told NewZimbabwe.com the stake's disposal was mired in secrecy.

"As organised labour, we represent workers' interests, but we have noted that the process has been shrouded in secrecy. However, from reports we are reading in the press it appears NSSA is selling to politically connected persons," said Mutasa.

"The question now becomes whether NSSA has not been forced to dispose of the most valuable asset it holds," he said.

Mutasa said he had since challenged Labour Minister Paul Mavima to take steps necessary to ensure workers, citizens and Parliament were made aware of the murky deal.

However, NSSA's communications executive Tendai Mutseyekwa said the process to dispose the stake commenced in January 2021 as part of initiatives to implement phase three of the insurance cluster consolidation strategy which involves reducing its stake in FML.

"Out of the total 66.2%, we are offloading up to 31.2% to a strategic partner. This strategic move will see NSSA keep a majority shareholding at 35%, in compliance with Zimbabwe Stock Exchange and IPEC (Insurance and Pensions Commission) requirements while bringing in a strategic investor with solid financial resources, synergistic, technical, and strategic benefits to catapult FML into a regional insurance powerhouse," he said.

Mutseyekwa maintained NSSA had been non-compliant since 2012 and now intended to be a responsible corporate entity in line with its new values of transparency by sharing its investment risk in line with good corporate governance.

"Phase one of the insurance cluster consolidation was initiated in 2017 and involved the merging of short-term insurer, NicozDiamond into FMHL through a disposal of NSSA's stake in NicozDiamond in return for shares in FMHL. The transaction helped strengthen FMHL's short term insurance business and solidify its market standing as one of the leading insurers in the country," he said.

The NSSA spokesperson said the second phase, which was implemented late 2020, saw NSSA support the consolidation of Zimre Holdings' strategic business units - Fidelity and Zimbabwe Property Investment (ZPI) - through the disposal of NSSA's shareholdings in Fidelity Life and ZPI in a share swap deal with ZHL.

"While NSSA's support has helped FMHL to be where it is today, the strategic shareholder is expected to unlock further value through better technical and financial resources. Phase three will see NSSA reduce its shareholding to a maximum of 35% through the disposal of shares to a strategic shareholder," he said.

Mutseyekwa added that proceeds from the disposal of FML shares will be allocated to offshore investments that generate foreign currency, in line with the National Development Strategy that enables pension funds to invest offshore in the interest of value preservation.

However, the ZCTU leader dismissed NSSA's investment strategy arguing the transaction was another dirty deal of fleecing employees their hard earned savings.

"We don't agree, NSSA cannot justify selling all assets that can hedge against inflation and currency devaluation. If for instance they get paid in local currency, what will NSSA do with it? NSSA cannot be selling its assets to a single buyer or entities linked to one buyer who is politically connected.

"We don't think this is the right time to sell such priced and important assets. Both NSSA and the Ministry (of Labour) are failing to convince us. This is another transaction that will shortchange workers, pensioners and the economy while benefiting a few elites and their cronies," Mutasa said.

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