The government said it has issued a five-year risk-free bond to cover its indebtedness to the Social Security and National Insurance Trust (SSNIT).
A Deputy Minister of Finance, Mrs Mona Quartey, told the GRAPHIC BUSINESS through a text message that the government was also paying the “rest month by month so at this time there is no problem with funds for SSNIT investments.”
She, however, failed, to disclose the total amount of money the government owed SSNIT, neither did she mention the period within which the debt is expected to be settled.
The deputy minister could also not say whether the debt is expected to be defrayed with interest or not neither did she mention the coupon price for the bond.
It is not clear why the government and the state managed SSNIT are refusing to declare the exact amount owed the Trust.
While some claim the amount is about GH¢1 billion, others are of the view that the total indebtedness which has accumulated over the years is now at about GH¢8 billion. SSNIT denies media claims
When confronted on air last week, the Director of Public Affairs at SSNIT, Ms Eva Amegashie, told the Citi Breakfast Show host that the government always settles its debts, unlike some private institutions.
“When government owes, government pays. There are private companies which owe but they never pay; but government always pays. Even if it delays, it pays and does not always only pay in cash – it pays in so many ways so it’s not new that government owes,” she explained.
“They used to but now they have paid up to about the end of last year, so it’s not true,” Ms Amegashie insisted.
But GRAPHIC BUSINESS sources told the paper that the government’s indebtedness to the Trust as at last year was about GH¢600 million because about GH¢1.4 billion had been settled.
It was also revealed that the amount owed to the Trust is mainly from loans the government contracted from the Trust for projects and not from its inability to settle the pension contributions of public sector workers.
Governments, both past and present, are said to perceive pensions funds as easy targets to fall on in times of need.
This is because they are able to bulldoze their way to borrow any amount at any time and decide to settle it as and when they find conducive.
Under normal circumstances, the idea of borrowing pension funds is not in bad taste because the world over, pension funds are a source of long-term funding for long-term projects.
However, many investment analysts and actuaries have described the actions of governments as far as honouring its obligation to the Trust as most unfortunate and a dangerous phenomenon that threatens the sustainability and growth of the scheme.
They argued that for the Trust to be sustainable over the years, there is the need for the managers of the scheme to invest and ensure that returns on those investments are high enough to keep the pension scheme running.
For instance, the Managing Director of Ecobank Development Corporation (EDC), Haruna Iddrisu, told the paper that the more the government holds or refuses to settle its indebtedness to the Trust, the more SSNIT loses on not just the principal amount but on the interest itself.
To him, if the allegations are anything to go by, the multiplier effect of the government’s action would be a threat to the continuous sustainability of the pension scheme.