Multiplier effect of pensions shapes development momentum
By Amanda-Ellen Nicola Jojo
Societies across the globe increasingly acknowledge that social security has a role in shaping each nation’s economic development.
Economic growth creates the material basis for adequate social security benefits, while social security systems contribute to stabilising economies and often even stimulating economic growth.
The strategic distribution of pension funds is emerging as a critical driver of economic growth in Zimbabwe, with far-reaching impacts that extend beyond individual beneficiaries to stimulate broader market activity.
According to International Trade Union Confederation, social protection is not only an investment in people, it is also an investment in the broader economy; it can trigger a virtuous economic cycle that increases employment, productivity, tax revenue and overall economic growth, especially in developing countries
In an interview with Business Times, Leniance Mhosva, a 45-year-old hairstylist and owner of Luscious Locks Salon in Harare, expressed her pride in her business but voiced concerns about retirement.
“I love what I do, but I often think about my future,” she stated.
Mhosva highlighted the importance of social security, acknowledging its benefits while noting the system’s complexities.
“We focus so much on running our businesses that we often overlook our personal financial planning,” she explained.
Her insights reflect a common sentiment among Zimbabwean entrepreneurs, emphasising the urgent need for financial literacy and accessible resources to navigate social security and secure their futures in uncertain economic times.
Deputy Director for Marketing and Public Relations at the National Social Security Authority (NSSA), Tendai Mutseyekwa, told Business Times that the authority remains committed to tackling financial illiteracy among potential pension contributors through targeted educational initiatives aimed at clarifying the benefits and processes of social security contributions.
This effort is particularly vital as the strategic distribution of pension funds emerges as a key driver of economic growth in Zimbabwe, with implications that extend beyond individual beneficiaries to invigorate broader market activity and strengthen the interconnection between social security and the nation’s economic development.
Mutseyekwa said: “The issue of financial illiteracy among potential pension contributors is a critical issue for NSSA and is being addressed through a range of strategies aimed at improving understanding and participation in the social security administration.”
These efforts are designed to ensure that individuals are well-informed about the benefits and processes involved in contributing to and benefiting from the NSSA pension scheme.
“NSSA conducts educational campaigns and outreach programmes to raise awareness among workers and employers about the importance of pension schemes, benefits of regular contributions, and the enrolment process. These initiatives include public talks, seminars, and multilingual pamphlet distribution.
“To simplify communication, NSSA provides information in accessible formats, using local languages to dispel common misconceptions. The authority partners with employers to ensure employees understand their rights and obligations under the pension scheme, while also collaborating with worker representative bodies for broader educational outreach.
“Additionally, NSSA offers training for both employees and employers on social security administration, contribution calculations, and benefit tracking. Embracing technology, NSSA has developed self-service platforms that allow individuals to access their account information and important pension-related resourceseasily.”
Non-compliant employers hinder the potential economic growth that social security systems can provide, as highlighted by the International Labour Organisation (ILO), which states that “effective social security systems are essential for sustainable economic development.”
To address the challenges posed by non-compliant employers, NSSA has implemented various strategies to ensure timely contributions and protect the rights of contributors.
“Ordinarily NSSA uses the carrot and stick approach in debt management and where soft collection strategies would have failed, the Authority is empowered to garnish employers where soft methods of debt recovery fail but this is used as a last resort. The NSSA Act is clear on how defaulters are handled.
“NSSA employs Compliance Inspectors whose major role is to monitor and to conduct inspection audits on employers to ensure adherence to the statutory provisions. The inspections include regular checks and audits of employer records to verify that contributions are being made correctly and in a timely manner. By identifying non-compliant employers early, NSSA takes corrective action before it negatively impacts the contributors,” Mutseyekwa emphasised.
NSSA is taking proactive steps to educate employers about their legal obligations regarding pension contributions and the risks associated with non-compliance. Through a series of workshops, seminars, and direct outreach initiatives, NSSA aims to encourage voluntary compliance and prevent violations before they occur.
“Additionally, the organisation collaborates with key stakeholders, including tax authorities and local licensing bodies, to improve tracking of employer financial activities and strengthen enforcement of contribution requirements. Employers who neglect their pension responsibilities face penalties, such as fines, which serve as a strong incentive for timely compliance.
“These strategies are designed not only to hold non-compliant employers accountable but also to safeguard employees’ rights, ultimately enhancing trust in the pension system and ensuring greater financial security for contributors.”
Infrastructure is the backbone of any thriving society, enabling connectivity and access to services. Organisation for Economic Co-operation and Development (OECD) highlighted that the alignment of pension funds with infrastructure projects is particularly advantageous, as these long-term investments mirror the lengthy time horizons of pension liabilities, allowing for stable returns while contributing to essential economic development.
Against this background, NSSA is one of the largest institutional investors in the country and undertakes investments guided by and aligned to the government Vision 2030.
“Our investments are diversified across all critical sectors that include social and economic infrastructure (health, water and sanitation, housing delivery), renewable energy, agriculture and agriculture value chains, real estate, manufacturing, banking, insurance and offshore.”
The multiplier effects of the NSSA investment strategy significantly promote job security, create jobs, and boost economic productivity. These efforts stimulate overall economic growth across various sectors. This strategy supports government economic programmes, such as the National Development Strategy 1, which will soon transition to the National Development Strategy 2.
The Authority has invested in the energy sector towards the Centagrid Solar Power Station which now feeds 23 megawatts into the national grid. At the peak of construction, the project employed around 300 workers thus contributing to job creation and poverty alleviation.
Mutseyekwa said: “NSSA has invested into agriculture, financing summer and winter crops in support of government drive for improving productivity in agriculture.
Through NBS, a wholly owned NSSA subsidiary, the Authority continues to play a role in contributing towards decent accommodation for Zimbabwe through embarking on various housing projects across the country.
“Some of the completed housing projects are in Dzivarasekwa, Knockmalloch and Sunset Villas with development of serviced stands in Borrowdale and Glaudina contributing significantly to investment income.”
The Authority participated in the funding of the Harare-Kanyemba Road stretch through investing in Interim Payment Contracts (IPCs). The social impact of the project has seen a total of 103 employees working on the project and of these 61 are local labour thus contributing to poverty reduction among the local and improvement of economic activity.
Research suggests that one of the key global problems facing social security today is the fact that more than half of the world’s population are excluded from any type of statutory social security protection.
In the light of that, the Zimbabwe Association of Pension Funds (ZAPF) plays an essential role in lobbying for the interests of public and private sector pensioners, engaging with the government to ensure their concerns are heard. The emphasis is on shielding, backing, and enlightening its members, thus ZAPF raises awareness about the importance of pensions and employee benefits in Zimbabwe.
In a complementary role with the National Social Security Authority (NSSA), ZAPF is adopting innovative strategies to boost participation rates in pension schemes, particularly among underserved populations.
Speaking on the matter, ZAPF Director General Sandra Musevenzo highlighted that ZAPF is exploring the use of digital platforms to increase pension scheme participation among underserved populations.
“This includes partnering with mobile network operators to offer mobile-based pension schemes as well as developing micro-pension plans that cater to the needs of informal sector workers and financial literacy programmes to increase participation rates.
“ZAPF is currently running an innovation and creativity competition whose thrust is to explore extensive research and the creation of solutions are required to support pension funds in thriving in such an unpredictable macroeconomic climate.”
Given that there is no “one-size-fits-all” approach to social security benefits, the importance of collaboration among various stakeholders is crucial to bridge gaps in social protection and improve the aggregate pension setting in Zimbabwe, as the interplay of interests among different groups significantly influences the social benefits a country can provide.
Hence, ZAPF partners with stakeholders, including government, civil society, and industry players, to address gaps in social protection and enhance the pension landscape. Their engagement with the Ministry of Finance, IPEC, and others advocates for policy reforms, provides training, and promotes best practices in the pension industry.
Musevenzo said: “ZAPF collaborates with IPEC, NSSA, and industry players for pensioners’ medical outreach programmes. Partnerships with local universities—University of Zimbabwe, Harare Institute of Technology, Midlands State University, National University of Science and Technology, and Chinhoyi University of Technology—facilitate talent development, knowledge sharing, capacity building, financial inclusion, research, and policy development.”
Over the years, Zimbabwe’s economy has endured several bouts of hyperinflation, triggered by sharp currency depreciation and volatility, while external debts continue to hinder growth.
In the light of these economic headwinds, ZAPF is calling for regulatory reforms to ensure the pension industry’s long-term stability. The focus is on engaging with policymakers to promote financial inclusion, improve investment frameworks, and enhance governance and transparency.
“We are also engaging with the policymakers to promote the development of a comprehensive national pension policy, which would provide a framework for the development of the pensions industry and ensure that pension schemes are designed to meet the needs of all Zimbabweans.
Universal social protection is essential for building dynamic and inclusive societies and economic growth, social cohesion, and socioeconomic resilience, in line with Africa’s Agenda 2063.
Pan African Projects and Activity Development Officer, Dorcas Noruphiri, underscored that partnerships between the African Union, ISSA, ILO, and other stakeholders should be strengthened to ensure that universal social protection is effectively prioritised and funded.
“We need to strengthen collaboration between the African Union, ISSA, ILO and other key actors to ensure universal social protection is not just a policy goal, but a lived reality,” she said.
She explained that scaling impact requires more than good intentions, it needs systems that can deliver, monitor, and adapt.
“To make this work, we need better data systems, stronger institutional capacity, and resolute political commitment,” Noruphiri added. “Only then can we close the implementation gaps that leave many behind.”
At the heart of her call was a reminder that communities are not passive recipients of protection systems they are critical partners in driving their success.
“When we work together, share knowledge, and mobilise resources strategically, we can ensure social protection reaches those who need it most, including vulnerable communities in countries like Zimbabwe.”
The role of social protection in stimulating economic growth is widely recognised, with strong collaboration, smart pension investments, and active community involvement turning it into a catalyst for prosperity.
