Pensions Minister updates Parliament on SSNIT’s decision to divest 60 per cent of its Hotels Investment Portfolios 

By Iddi Yire 

Accra, July 11, GNA – Mr Ignatius Baffour Awuah, the Minister of Employment, Labour Relations and Pensions on Thursday updated Parliament on the decision of the Social Security and National Insurance Trust (SSNIT) to divest 60 per cent of shares of its Hotels Investment Portfolio. 

He said the decision of SSNIT to invest 60 per cent shares of its hotels’ investments portfolio aligned with the primary goals of the Scheme to provide monthly pensions and related benefits to workers in Ghana and ensure their retirement income security. 

The Minister said this in his response to a question by Mr Samuel Okudjeto Ablakwa, the National Democratic Congress NDC Member of Parliament MP for North Tongu on the Policy objective of SSNIT divesting itself of 60 per cent of shares of its Hotels Investment Portfolio. 

Mr Kwame Governs Agbodza, the Minority Chief Whip and NDC MP for Adaklu asked the questions on behalf of Mr Ablakwa, who was on a trip to Moscow, Russia. 

The Minister said the SSNIT decision to divest was also supported by its funding and investment objective. 

He said as a specially funded defined benefit scheme, SSNIT aimed to ensure adequate funds were available to pay member benefits in both the short term and long term. 

He said in terms of investment objectives, SSNIT had a statutory and fiduciary duty to invest the Scheme’s funds responsibly; this involves long-term growth at a reasonable price and income generation. 

Mr Baffour Awuah said in pursuant to these objectives, SSNIT had been implementing some strategic measures such as rebalancing the investment portfolio, increasing investments in fixed income and decreasing equity exposure. 

The rest are exiting or restructuring non-performing investments, improving the performance of investee companies, enhancing corporate governance and setting corporate targets. 

Others are improving the non-performing loan book, structuring underlying investment companies, monetizing real estate investment projects, and completing and monetizing ongoing real estate projects, including those in joint ventures. 

The Minister also mentioned enhancing commercial property portfolio performance by improving the performance of commercial properties 

“Mr Speaker, SSNIT’s decision to divest 60 per cent of its stake in the hotels is not an isolated decision but part of its broader strategy to improve its investment performance and ensure the long-term sustainability of the Scheme,” he said. 

Mr Agbodza again on behalf of the MP North Tongu asked the Minister why SSNIT considered only the sales option in the quest to intervene in its Hotels Investment Portfolio. 

Mr Baffour Awuah in his response noted that under SSNIT’s investment policy, the Scheme was permitted to adopt an acceptable exit method for its investment portfolios. 

He said for its total investment portfolio, SSNIT previously put in place several methods to turn around the business, these included changing Board Members, changing Management Personnel and the involvement of international management companies. 

He reiterated that SSNIT provided maintenance, statutory payments and maintenance of capital expenditure. 

Ordinarily, these payments should have been borne by the Hotels. 

Mr Baffour Awuah said despite these efforts, returns from the Hotels were either low or negative, as a result, SSNIT could not afford to continue spending pensioners’ funds to bail out these Hotels. 

He said the sale of the majority stake in the Hotels formed part of SSNIT’s broader strategy to enhance the performance and sustainability of the Scheme’s investment. 

“Mr Speaker, it is worth noting that having a majority stake or wholly owing a company does not guarantee performance.” 

He said for instance SSNIT minority stake in companies such as West Hill Mall Limited, GCB Bank, Republic Bank Ghana, Goil Ghana Ltd, Ecobank Ghana and Standard Chartered Bank Ghana; saying “despite SSNIT Minority stake in these companies, returns of SSNIT’s investment in these companies have been positive and relatively higher.” 

“Mr Speaker, SSNIT considered only the sales option for its Hotels Investment Portfolios as a strategic decision after multiple attempts at restructuring proved insufficient.” 

He said SSNIT, selling 60 per cent of its shares, was deemed the most viable solution to prevent further depletion of resources and to bring in private participation. 

GNA