The International Labour Organisation (ILO) has issued a warning regarding the sustainability of Ghana’s Social Security and National Insurance Trusts (SSNIT), stating that its funds may be depleted by 2036.
According to a report on myjoyonline.com, a recent study has revealed that SSNIT’s income will not be sufficient to cover its yearly expenses starting in 2029. This shortfall is projected to result in a gradual depletion of its reserves over time.
By the year 2036, the reserve ratio, which measures the ratio of reserves to total expenditures for the year, is anticipated to decline from 3.4 to zero.
“Starting in 2029, total income (contributions, investment income and other income) is no longer sufficient to pay for annual expenditures.
“The reserve starts to decrease. During the year 2036, the reserve drops to zero,” the report stated.
The primary cause of this situation is the government’s tardiness in fulfilling its obligations.
As of December 2021, the government’s debt to SSNIT stood at GH¢9.35 billion, with GH¢6.9 billion attributed to late payments.
This delay in government contributions has resulted in a 1.3 percent reduction in SSNIT’s investment returns.
The report indicates that the government’s failure to meet its financial responsibilities on time has shifted a considerable financial burden onto the private sector.
“Past experience suggests that, by not paying on time and not paying the interest income on delayed contributions, the government shifts an important part of the cost to the private sector,” the study stated.