Business News of Sunday, 9 October 2016
The Vice presidential nominee of the opposition New Patriotic Party (NPP), Dr. Mahamudu Bawumia, has promised an urgent review of the Social Security and National Insurance Trust (SSNIT) investments and costs to ensure its financial sustainability, if the party wins the 2016 elections.
Speaking at the NPP manifesto launch at the Trade Fair Centre in Accra, Dr. Bawumia warned the current course of SSNIT would leave it and pensioners in a dire situation.
“Our pensioners are under threat, currently the financial viability of the Social Security and National Insurance Trust is in question,” he cautioned.
In his address, Dr. Bawumia noted that, the World Bank in its 2016 report of governance of SSNIT, stated that “the actuarial valuation shows that the fund will become a cash flow negative in 2019 and all assets will be used up by 2031.”
“At this point, the benefits would have to match the inflows and will lead to very significant cuts in the benefit for current pensioners. This is the World Bank telling us that SSNIT is collapsing and that would result in a cut in pensions.”
As part of the urgent undertakings to ensure the sustainability of SSNIT, Dr. Bawumia said an NPP government will ensure that “the funds of the National Pension’s Regulatory Authority will be applied solely for the purpose of the development of pensions and we will fully implement section 103 of the pension act which assigns pension benefits for housing of workers.”
Eight Banks collapsing under this economy – Bawumia
Dr. Bawumia also highlighted the governing National Democratic Congress’ (NDC) handling of the economy, that has left eight banks also at the point of collapse.
“After eight years of mismanagement, the banking system has been pushed to dangerously fragile levels. Eight banks are currently on the edge of collapse,” he also warned.
Dr. Bawumia noted that, “under John Mahama, Ghana has now been classified as a country with a high risk of debt distress.”
Despite the NDC asserting that the loans it has been acquiring have been used for development projects, he retorted that the debt has not been channeled into development as “the value of total government investment in infrastructure is just about $7 billion.”
According to the IMF, “most of Ghana’s borrowing under this John Mahama government has been spent on corruption and consumption rather than investment,” The NPP running mate added.