Approximately 2.5 billion cedis of the government’s GH₵5 billion debt to the Social Security and National Insurance Trust (SSNIT) has been settled through the issuance of bonds.
This information was disclosed by Kofi Osafo-Maafo, the Director-General of SSNIT, who noted that the payment followed extensive negotiations with the government to enhance the financial stability of the scheme.
An independent actuarial assessment indicated that the government’s delays in addressing its debts adversely affected SSNIT’s investment potential.
As of December 31, 2021, SSNIT reported a total debt of GH₵9.3 billion, with the government responsible for a significant GH₵6.9 billion, accounting for about 75% of the Trust’s total indebtedness, which includes overdue contributions and accrued interest.
This considerable government debt places Ghana’s pension fund in a precarious situation, resulting in an annual decline of 1.3% in SSNIT’s investment returns.
However, during a stakeholder meeting with pensioners in Kumasi, the SSNIT Director-General confirmed that the government has made progress in settling approximately GH₵2.5 billion of its debts
“The government owes SSNIT and this is not a new thing. It’s probably span way over 10 years. Overtime and continuously we need to engage government and negotiate with them. And what we have had recently is that we’ve made some successes with that. The government most recently defrayed approximately 2.5 million cedis of the arrears in the form of bonds,” he said.
The trust is on a positive trajectory after making a net surplus of GH¢864million in 2023 from an initial deficit in 2021.
Mr. Osafo-Maafo explains the Trust anticipates similar results by the end of year, influenced by improvements in contributions collection, investment income and cost control.
“We are striving very hard to improve the net contributions, we are working hard to improve the net investment income and as well managing the business better,” he said.
Chief Actuary, Joseph Poku says the trust is working to ensure more contributions are generated to run the scheme in perpetuity.
“We are doing everything that we are suppose to do to ensure that we bring in new funds, have excess funds after paying the benefits put them in investments and make sure we manage those investments prudently to get more returns and add to the funds that are coming in,” he said.
Ashanti regional chair of the Pensioners’ Association, Adarkwa Tuffour emphasized on strengthening, safeguarding and improving it.
“SSNIT has been and continue to be the lifeline of thousands of Ghanaians, therefore we must safeguard, strengthen and improve the scheme. We must recognize and appreciate its value,” he said.