NSSA flexes strong balance sheet

CLOUDINE MATOLA

The National Social Security Authority (NSSA), a cash-rich State-run pay-as-you-go pension scheme, has grown its balance sheet to just over US$1bn in 2026, up from approximately US$300m in 2022, despite rising unemployment and persistent economic headwinds, Business Times can report.

Speaking on the sidelines of the authority’s annual general meeting (AGM), NSSA general manager Charles Shava said the fund’s asset base had expanded significantly over the past four years, even within an inflationary operating environment.

“The pension fund is currently, in terms of the balance sheet, just over a billion dollars. If you compare that with 2022, where it was at about US$300m, it is now sitting at about a billion dollars. And it has grown over the past four years, very exponentially, within the inflationary environment,” Shava said.

Shava said the authority has focused on safeguarding pensioners’ contributions through a diversified and prudent investment strategy designed to balance liquidity and value preservation.

“We are ensuring that we undertake very prudent investments, as advised by our attorneys. We invest in alternative assets that give us better returns rather than relying solely on traditional money markets. At times certain classes do not perform well, but we balance our portfolio to make sure we invest in assets that can give us liquidity when required to pay pensioners, while also holding value against inflation, such as real estate and related instruments,” he said.

However, NSSA’s growth trajectory is being constrained by structural shifts in the labour market, with an estimated 2.5 million contributors classified as inactive.

“When companies close, contributions decline because many people move into unemployment. As you can see, about 2.5m are inactive employees. These are individuals who once contributed to NSSA but are no longer contributing. They could have been active contributors, but under the circumstances, we believe we are doing well,” Shava said.

Despite the challenging operating environment, Shava said the authority had managed to maintain pension payouts above the international poverty threshold of US$2 per day.

“In 2024, we were operating in a highly inflationary environment. However, we sought to keep pension levels above the minimum US$2 per day. During the year, we were paying between US$60 and US$70 per month. We started at US$60 and ended the year at US$70, which translates to more than US$2 per day.

“We tried, under very difficult conditions, to keep our heads above water and to maintain pensions above the minimum threshold. The inflationary pressures did affect us. We could have paid more if the economic environment had been more stable and if our investments had generated stronger returns. Our portfolio was affected by inflation and subdued performance in certain asset classes,” he said.