The NPP’s running mate for the 2016 elections, Dr. Mahamudu Bawumia, has warned of a likely collapse of Ghana’s pension scheme by 2019 due to some financial challenges confronting the institution.
According to Dr. Bawumia, the financial viability of the Social Security and National Insurance Trust (SSNIT), has deteriorated making it difficult for the company to meet its obligation to contributors to the fund.
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.”
The former Deputy Governor of the Bank of Ghana also blamed the current government over what he says is its mismanagement of the economy.
Meanwhile Dr. Bawumia has assured that an NPP government will ensure that “the funds of the National Pensions 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.
