IMANI ALERT TO PRESIDENT MAHAMA: HOW GhS 1.2bn ($500M) TIER 2 PENSION CONTRIBUTIONS MAY BE INVOLVED IN THE CONTROVERSIAL FORTIZ-MERCHANT BANK SALE SAGA

The Merchant Bank Allegations

There are serious allegations that the Bank of Ghana has made some of the Temporary Pension Fund Account (TPFA), Tier 2 PENSION funds being held at BoG) to Fortiz to purchase Merchant Bank. The TPFA would have accrued Ghs 1.3bn in the past three years that it had not been remitted to contributors’ Corporate Trustees. There are common denominators in the Fortiz-Merchant Bank saga and the TPFA. Mr. Mawuli Hedo is a Director of Both Fortiz and First Bank, the Scheme Administrators of the Temporary Pension Fund Account being held at the Bank of Ghana. Obviously, another interesting common denominator in all this is the Bank of Ghana itself. They are once Custodial Bank holding the TPFA. Is it true that they have made the TPFA available to Fortiz in their quest to purchase Merchant Bank? Doesn’t the Ghanaian pension contributor have the right to know?

Alas, the state’s Social Security and National Insurance Trust (SSNIT) is another common denominator. SSNIT has been the collection vehicle of the Tier 2 since January 2010 when the implementation of the three-tiered pension system started. This they did till October 2012 – for some companies. All companies that have yet to select a licensed trustee to run their Tier 2 contributions still pay to SSNIT. Again, SSNIT is the majority shareholder of Merchant Bank. The more one knows, the clearer it looks what exactly is happening.

Though NPRA indicated that it was going to invest TPFA in Treasury Bills pending the registration of Pension Schemes, provisional statements released by NPRA in October 2012 indicated a return on investment of 2.75% per annum. This is disappointing given that the average Treasure Bill returns between January 2010 and October 2012 is around 15% per annum. Additionally the same provisional statement covered a period of 18months instead of the 34 months period (January 2010 to October 2012) over which contributions had been made into the TPFA.

The NPRA did indicate, in their Public Notice on their website in October 2012 that accrued benefits and contributions paid into the TPFA would be remitted to Trustees chosen by employers, starting January 2013. This has not happened up till now.

One of the serious implications of this situation is that people who were 54 years and younger when implementation started in January 2010 WILL NOT get the full value of their lump-sum benefits, upon retirement at 60. Thus all Ghanaian workers - both private sector or public sector workers - who were 54 years old or younger as at January 2010 will not get their full lump-sum benefits from Tier 2 Pension Schemes as NPRA is still holding on to 34 months of workers contributions and accrued benefits. There is no word from the National Pensions Regulatory Authority as to when these funds will be paid to the contributors or even how it will be paid.

Background

In September 2009, the Board of the National Pensions Regulatory Authority (NPRA) was set up to oversee the implementation of the National Pensions Act, 2008 (Act 766). The Act seeks to create a unified pension system under a three tiered pension structure, with SSNIT as the manager of the First Tier, and Approved Trustees (Corporate & Individual Trustees) as operators of the mandatory Tier 2 and Voluntary Tier 3 schemes.

In January 2010, the Temporary Pension Fund Account (TPFA) was set up to provisionally administer Tier 2 contributions pending the licensing of Trustees and the registering of Pension Schemes. Employers, from January 2010, remitted 5% (Tier 2 contributions) of their employees’ salaries to the TPFA. This continued for most employers till October 2012. First Bank was appointed by to be the Administrators of the TPFA, with Bank of Ghana serving as the Custodial Bank. NPRA itself, acting ultra-vires of the Pensions Law, acted as the Fund Managers of the TPFA.

In October 2011, the NPRA issued the needed administrative guidelines to make way for the full implementation of the Act. Private companies - Corporate Trustees, Fund Managers and Pension Fund Custodians - purposely established to fully administer the Tiers 2 and 3 schemes were licensed by the NPRA on March 16, 2012.

The NPRA finally, after almost 3 year wait without much information to workers and service providers, registered Pensions Schemes at the end of October 2012. Full implementation under of the reforms - Act 766 - thus started in November 2012.

What the Law Says
Section 218(4) says that the Board of NPRA shall within 90 days of licensing Pension Fund Managers, Pension Fund Custodians and Trustees, compute and transfer the accrued contributions and returns in the TPFA to Occupational Pension Funds opened by Trustees of employers’ choice and registered by NPRA. Pension Fund Managers, Pension Fund Custodians and Trustees have been licensed since March 16th 2012, over 18 months now, and yet it took the NPRA till end if October 2012 to register Schemes. The NPRA has not complied with Section 218(4).

Conclusion and Recommendation
With everything going on, we recommend that:

1. All activities of the TPFA should be audited by an external auditor.
2. Accrued contributions in the TPFA should be transferred into registered Tier 2 Pension Schemes selected by the various employers.
3. Bank of Ghana should submit a report on its stewardship of the TPFA.

Credit Mr. Franklin Cudjoe(Imani Ghana)

Do African Leaders Truly Respect our Freedom Fighters?

The world received news of the death "anti apartheid hero" Nelson Mandela. Though it is sad we can not say we didn't quite expect it.He had paid his due to his society,country and the world at large.
We hear from the international media messages from leaders of various countries expressing solidarity and condolence to S.A and the entire Africa.

UK Prime MinisterVerified account ‏@Number10gov

PM signs Nelson Mandela condolence book: Your generosity, compassion & forgiveness have given us lessons to live by pic.twitter.com/JN1N343vGr

WASHINGTON, Dec. 5 U.S. President Barack Obama has ordered flags to be lowered to half-staff until Monday' sunset to mourn the death of Nelson Mandela

"His commitment to transfer power and reconcile with those who jailed him set an example that all humanity should aspire to, whether in the lives of nations or our own personal lives. And the fact that he did it all with grace and good humour, and an ability to acknowledge his own imperfections, only makes the man that much more remarkable"-Barrack O. 

Ghana's Kuffour says Mandela is a rare species of human race,and 

Prez John Dramani say Mandela Taught a Continent to Forgive!

In all of this i ask,Does Africa really value the toil of freedom fighters like Mandela,Nkrumah and the rest of them?

The answer that rings in my ears is 

 mostly negative.The new breed of African leaders seem to be struggling to understand why the likes of Mandela will risk their live for the independence of their homeland.

The continent with its own people in leadership is bedeviled with various forms of corruption,depriving its citizens basic amenities from water,lights,schools roads,modern markets among others.

On the contrary,politicians are seem living a life of luxury and amassing wealth through dubious deals.

Most economies on the continent is stagnant coupled increase cost of living with each passing day.

Our fore bearers had ideals they stood for,fought for and were prepared to die for such ideals.That's what made them heroic!

But these days we have lip service politician echoing problems of society and neglect by the ruling parties only get the chance to perpetuate worse.

President Mahama's first report card

Ghana's President John Dramani Mahama charmed voters last year with his "Onetouch", but 12 months on some are questioning if he has the skills to manage the country's growing economy.

Twelve months after Mahama, 55, won the disputed election, Ghana's deficit has grown bigger, the cost of living is higher and a gloomy outlook  for west Africa's second-largest economy.

When the former vice-president was thrust into the top job by the death of his predecessor John Atta Mills in July 2012, some analysts questioned if he was ready to be chief executive.

After a period of national mourning for Mills, the election season came in speedily and so Mahama campaigned, no job performance, became the subject of scrutiny.

But the focus has since shifted 12months on!
He's still a very personable, likable guy. He is certainly still more likeable than some of the other political figures that he is compared to," Victor Brobbey, a researcher at the Centre for Democratic Development disclosed in an interview with AFP

But "a significant amount" of his appeal has eroded, added Brobbey.

"The economic problems he's facing now are somewhat of his own making.It's difficult to dispute that," he added.

Ghana has boasted some of the highest growth rates in the world in recent years, including eight per cent in 2012, driven largely by exports of gold, cocoa and now oil, which the nation of 25 million began producing in 2010.

But the bad news started for Mahama right after his inauguration in January.

In February, the government announced that it had overshot its deficit target by nearly double, going from 4.8 per cent of GDP at the beginning of 2012 to 12.1 per cent of GDP at the beginning of this year.

Fitch downgraded Ghana's debt rating to "B" from "B+" over its deficit. As the year went on, inflation jumped to 13.1 percent and the cedi plummeted, becoming one of Africa's worst performing currencies.

Brobbey said skyrocketing deficits were a common result of elections in Ghana, which has held six presidential votes since 1992 but is regarded as one of the most stable democracies in the region.

Other west African countries are still struggling with authoritarian rule and unrest, but analysts say the peolple of Ghana now have higher expectations, particularly demanding that revenue from commodity exports is well spent.

Financial analyst Sydney Casely-Hayford said the inexperienced Mahama has shown weak leadership in his first year.

"In terms of success stories we haven't done much," he said, adding that Mahama "is probably trying to figure out who he is and how he got here and what power and authority he has".

Reports released in mid-2013 sounded alarm bells over the nascent offshore oil sector.

Promises to spend oil revenue carefully on infrastructure, debt payments and agricultural development have not been well executed, the Accra-based Africa Centre for Energy Policy also added.

Instead, too much money has been devoted to unproductive political offices.

The Civil Society Platform on Oil and Gas has said that failure to close tax loopholes on private energy firms have cost the country tens of millions of dollars. Anny Osabutey, a journalist with Ghana's respected Joy FM radio and a frequent critic of government,said there were too many unanswered questions about how the administration has been spending its money.

"When you say everything has been eaten to the bone, people begin to wonder, who ate it?" he said.

A scandal erupted last month when deputy minister of communications Victoria Hammah was recorded as saying that she would stay in politics until she became a millionaire. She was fired immediately.

Other scandals involving private companies making off with millions in taxpayers' money by overcharging the government various services partially executed and those that has nothing to show for.

The government has promised prosecutions in the case, but they have been slow to happen.

"I think the president has tried to pretend that he's only just stumbled on corruption in Ghana and he's playing a lot of lip service and trying to appease people into thinking he's actually doing something," said Casely-Hayford.

Brobbey credited Mahama with taking steps to curb the deficit by cutting subsidies on fuel and raising taxes and electricity rates.

The jumps in those costs have raised prices on everything from bus tickets to clean water and brought small, sporadic protests in poor neighbourhoods around the capital Accra.

The president's political position is strong, as his National Democratic Congress controls parliament.

But analysts said the opposition New Patriotic Party is still formidable and could easily exploit Mahama's fumbles. 

Info culled from  http://www.africareview.com