GOVERNMENT PUTS PENSIONERS FUNDS AT D900,000,000 Loss Risk!
Where is the SOE Commission?
Mismanagement and the Ill-Fated Bus Procurement: A Continuing Saga at SSHFC
The Social Security and Housing Finance Corporation (SSHFC) is grappling with a staggering D900 million non-performing investment after procuring 70 buses for its subsidiary, the Gambia Transport Service Company (GTSC), using pensioners’ funds.
In 2022, OpenGambia first broke the story of the irregular procurement directed by the President. SSHFC facilitated the purchase, financed by a substantial loan sourced from the pension funds it manages. Notably, GTSC did not initiate this procurement based on operational needs. Instead, directives came from the Office of the President, bypassing the usual needs assessment and feasibility studies.
External influences, mainly TKExport, played a significant role in this decision. The approach raises serious questions about the transparency and motivation behind the procurement, especially as it sidestepped standard procedures designed to safeguard public interests.
The decision to divert such a significant portion of the fund toward an investment not based on GTSC’s operational needs calls into question the priorities of SSHFC’s management. The potential risk to pensioners’ savings highlights serious corporate governance issues.
GTSC has struggled to meet its financial obligations two years after the acquisition. Escalating operational costs—driven by rising fuel prices and exchange rate fluctuations—have exacerbated the company’s financial challenges. In a letter dated August 2024, leaked to OpenGambia, GTSC management requested a revision of the payment ratio. They proposed reducing their contribution from the initially suggested 34% to 16%, with the Gambia government covering the remaining 84%.
This revision reflects GTSC’s inability to service the debt. Despite the significant investment, no repayments—neither principal nor interest—have been made on the loan since its issuance. The lack of an agreed-upon repayment schedule between SSHFC, GTSC, and the government further complicates the situation.
The use of pensioners’ funds for this high-risk investment should alarm stakeholders and the public alike. The absence of repayments directly threatens the pension fund’s financial stability. This arrangement neglects the fiduciary duty owed to the fund contributors, compromising their future security.
The circumstances surrounding the procurement point to undue influence from the Presidency and a lack of transparency. The decision has been influenced by individuals driven by greed and political motivations rather than the best interests of the public and the financial institutions involved. This mismanagement not only jeopardises the financial well-being of pensioners but also highlights systemic issues within the governance structures responsible for safeguarding public assets.
In the wake of this crisis, questions must be raised regarding the oversight role of the newly formed SOE Commission, which was established to oversee the governance of state-owned enterprises, including SSHFC. The commission, headed by Ousainou Ngum, was mandated to ensure good governance practices but has evidently failed to detect and prevent a potential loss as significant as D900 million. This oversight failure further emphasises the commission’s lack of effectiveness and accountability, as it failed to act despite clear red flags surrounding the investment.
Moreover, the Board of Directors, led by Chairman Remy Joiner, has also fallen short in its fiduciary duties, allowing such mismanagement of pensioners’ funds. Both the SOE Commission and the SSHFC Board must now take decisive action. Their heads should resign for their failures, and both entities must ensure that all necessary measures are taken to recover the funds and establish more robust governance frameworks moving forward. The current scenario underlines the urgency for these bodies to rectify the situation and restore trust by implementing safeguards to prevent similar governance failures.
The trust placed in SSHFC to manage and protect pension funds is paramount. Any actions compromising this trust have far-reaching implications for the financial security of countless Gambians who rely on these funds for their retirement and future well-being.
The challenges GTSC and SSHFC face underscore the critical importance of responsible management of public resources. Protecting pensioners’ interests requires decisive action and a commitment to transparency and accountability.
The ongoing situation is a stark reminder that public institutions must operate with integrity and in the best interests of those they serve. A breakdown in social security has the potential to lead to widespread insecurity.
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