The Auditor-General’s Department (A-G) has exposed the Social Security and National Insurance Trust (SSNIT) for blowing some GHC 1.1 billion (US$185 million) on a ghost project that may compel it to kiss the money goodbye.
The amount was pumped into two curious housing projects in the Greater Accra Region- Klagon and Sakumono said the A-G in its 1000-page 2019 Report of Public Boards, Corporations and Other Statutory Institutions.
According to the A-G the reckless investment of SSNIT on the 32 housing units looks unlikely that the state social security company will recover its return on investment because no due diligence was conducted.
“…No due diligence was performed on the investment, the inability to anticipate the increased supply of houses in the housing market, coupled with the wrong estimation of the project cost resulted in this state of affairs. Over US$185,250,000.00 of Pensioners’ funds has been locked up in the investment,” the report read.
“In spite of the provision of Section 91(1) of the PFM Act 2016, Management of SSNIT sunk a cedi equivalent of US$185,250,000.00 in a housing Project at Klagon and Sakumono. The Project is halted and it is being managed by RSS, a Joint Venture Company belonging to SSNIT and RegimanuelGray.”
According to the A-G, when it visited the real estate that had gulped pensioners’ funds totalling more than GHC 1 billion, only two flats had been sold. “Out of the 32 completed housing units, only two of them were sold. Also, none of the 9 flats completed blocks at Klagon, Sakumono site was sold,” the Audit Service revealed.
“We urged the Board to consider RSS’s proposal to rent the houses to reduce the losses on the investment. We further recommended to the Trust to institute an effective project evaluation process in investments of similar nature.”
Meanwhile, this report of the wasteful management of pensioners’ funds is coming a few days after the General Secretary of the Trades Union Congress (TUC), Dr. Anthony Yaw Baah had commended the Management of SSNIT for
improvement on its operations.
He explained that under the leadership of Dr. Kwame Addo Kufuor, the immediate past Board Chairman and the Director-General, Dr. John Ofori-Tenkorang, SSNIT has worked tirelessly to improve its operations and image.
Critics disagree with this view because civil society groups such as IMANI Africa has often criticised SSNIT for its wasteful investments that bring little returns to pensioners.