ZiG Breath Life Into Social Security

By Shingirai Vambe.

Zimbabwe’s economic challenges have significantly impacted the country’s social security structure, leading to a decline in health and funeral insurance coverage among citizens in the informal sector. To address this, the National Social Security Authority (NSSA) and Insurance and Pensions Commission (IPEC) have launched a program to educate citizens and raise awareness about the importance of insurance and pensions.

IPEC Commissioner Grace Muradzikwa emphasized the need for financial literacy, noting that insurance and pensions provide essential safety nets for individuals and businesses. She highlighted the misconception that citizens have about these products and encouraged them to reconsider their value, especially in light of the country’s recent currency stability and reforms.

Addressing Journalists on the commencement of the IPEC, NSSA 2024 mentorship programme, IPEC Commissioner, Grace Muradzikwa said the sector with its complexities and technicalities, there was need to engage on the subject by its nature of providing safety nets for individuals and businesses in the event of losses and risk.

“It represents a promise, the insurer will be on hand to reduce a financial burden to the policy holder after loss and unforeseen events and life after retirement, the various products are a corner stone of financial stability and I regard them as sleep ease products,” said Muradzikwa.

The introduction of the Zimbabwe Gold (ZiG) currency on May 1, 2024, has brought some relief to pensioners, who were previously receiving minimal payouts due to hyperinflation. While some pensioners prefer their payouts in US dollars, prices have increased in US dollars, making the ZiG a more attractive option for transactions. Citizens are eager to access more ZiGs to pay their bills, as prices in supermarkets have become relatively cheaper when paying in local currency.

Financial landscape has shaped the pensions and insurance sector to be more innovative, coming up with more schemes flexible to meet the needs of Zimbabwean citizens also working in the private sector, which has largely taken toll of the country’s economy.

The central bank’s measures to curb inflation and restore monetary trust have shown promise, and the insurance and pensions sector is adapting to meet the evolving needs of Zimbabweans, including those in the private sector. By promoting financial literacy and innovative products, NSSA and IPEC aim to ensure that citizens understand the value of insurance and pensions in achieving financial stability and security.

Social security, insurance and pensions performance in Zimbabwe is reportedly showing a positive trajectory derived from the reforms and country’s financial stability, similar with neighboring countries robust insurance system.

NSSA Acting General Manager Charles Shava emphasized that life cannot be replaced and that social security, insurance, and pensions are essential safety nets. He noted that NSSA’s products are not a sole means of support but rather a supplement to other social security or occupational schemes.

Despite investments in various sectors, beneficiaries have expressed discontent with the amount of money they receive from NSSA. Shava clarified that payouts will be made in the currency of contribution, either ZWD or USD, as per the law.

NSSA has digitalized its operations, improved services, and introduced mobile clinics for rural and marginalized areas, as well as life certificates to prevent ghost beneficiaries. With the current shift from formal to informal sector, NSSA aims to provide safety nets for those in the private sector, expected to be larger than any previous scheme.

“A pension scheme naturally require investments, we have a lot of investments which we hope and expect would help members of their welfare and payouts,” added shava.

The Social Security Authority has invested in money markets, agriculture, construction of roads, buildings around the country used to generate revenue for contributing members. however, beneficiaries have remained disgruntled on the amount of money they keep receiving from NSSA, regardless of such massive investments and numerous cases of misappropriation of funds within the organization.

Shava told the Post On Sunday newspaper that as NSSA they have over 200 000 contributing members and beneficiaries are getting the same minimum pension and a maximum of around US$60.