NRZ Pension Scheme Under Scrutiny Over Secretive Offshore Property Investments

By Shingirai Vambe

HARARE – A cloud of controversy has enveloped the National Railways of Zimbabwe (NRZ) pension scheme, following revelations that the fund’s investment in foreign properties in the UK and other countries may not have been fully disclosed. The self-administered fund, established in 1949 to provide retirement benefits to its members, has come under scrutiny for its opaque investment decisions.

Sources close to the matter have disclosed that the fund’s UK property investments have raised eyebrows, sparking calls for a thorough investigation. This is not the first time a pension fund has faced scrutiny over its investment decisions, with similar cases emerging in the UK.

The NRZ’s troubles began decades ago, when the parastatal embarked on a series of ill-fated investments, including acquiring properties in the UK and other countries. The move was seen as a way to diversify its portfolio and generate revenue, but it has ultimately led to financial ruin.

The properties were acquired during the era of white colonialists, who made up a significant portion of the NRZ’s workforce at the time. Many of these workers retained their jobs after independence and continued to influence the company’s decisions, including the foreign property investments.

However, the investments have failed to yield the expected returns, and the NRZ is now struggling to maintain its rail network, let alone pay its workers’ pensions. The situation has been exacerbated by years of mismanagement, cronyism, and embezzlement, which have left the company on the verge of collapse with aging infrastructure and rolling stock, frequent train breakdowns and delays, no longer have the passenger train and wallowing in billions of dollars in debt.

As the investigation into the NRZ pension scheme’s foreign properties continues, many are calling for a comprehensive overhaul of the company, including the prosecution of corrupt officials and the implementation of transparent and accountable governance structures. Only then can the NRZ hope to regain the trust of its members, employees, and the Zimbabwean public.

Contacted for a comment, the Insurance and Pensions Commission, Commissioner, Grace Muradzikwa, had not yet responded by time of going to publish.

The NRZ issued a statement that its higher Authority disposed some of its properties in Botswana and South Africa to the Botswana Government in the 90s. However, the statement also read that there are two different entities, the company and the pensions and Insurance sector which operate separately.

Adding to this information, the communique highlighted a mining business activity underway in South Africa, as an investment under the company, Africa Exploration Mining and Finance Cooperation (AEMCF) at 33.33 percent shareholding apiece between SA, Zambia and Zimbabwe, formerly Rhodesia, managed by a company called Pan African Minerals Development Company (PAMDC).

The statement further reads, “NRZ has no right nor control over properties owned by the pension fund. The relationship between the NRZ and the pension fund is that the fund’s offshore properties are well managed and proceeds are benefitting the membership”.

Various companies have established pensions and insurance schemes for the benefit of their employees when they retire. The scheme has helped a lot of people in their lives outside work, however there are still challenges with many who have failed to update or make a follow up of their contributions and their claims have since lapsed. Companies have also failed to adequately monitor their beneficiaries and update them on the foregoing especially during the period at which the country changed currencies.

IPEC Commissioner, Grace Muradzikwa told journalists that they are currently working with every sector so that no place and no one is left behind the safety nets, guarding against corrupt tendencies at the expense of pensions and insurance contributing members.

NRZ said houses it used to own for its workers were sold and former employees were the beneficiaries and, in the meantime, land on either side of the track is regarded as Railway Reserve Land for future railway expansion. The company has since started leasing out land, in form of business stands, for commercial use. It started leasing out most of its properties around the country as a source of revenue for other activities, though very few individuals were reportedly benefiting from the proceeds, prompting the company to update its property records in and out of the country.

The Assets left by the Rhodesian company are said to have been shared to Zambia and Zimbabwe, being managed by a committee from both countries called Higher Authority.