Tanzania government to finally pay Sh2.17 trillion debt to PSSSF

Dodoma. The government on Wednesday December 22,  2021 signed an agreement with the Public Service Social Security Fund (PSSSF) on the payment of Sh2.17 trillion debt in the form of a special bond.
The amount that would be paid in a period of eight to 25 years was part of Sh4.66 trillion owed by the Fund inherited from the defunct Public Service Pensions Fund (PSPF).
Speaking in Dodoma shortly after inking the agreement yesterday, Finance and Planning permanent secretary Emmanuel Tutuba said the agreement has been made after a comprehensive analysis on the best way of servicing the debt.
He said despite being established in 1999, PSPF started paying benefits to retirees effectively from 2004 covering beneficiaries who were recruited in 1970.
“This has caused problems in balancing resources of the fund and its respective obligations to pay retirees’ benefits,” he said.
He said the government has found it appropriate to review and clear the debts in order to ensure sustainability of the fund and citizens’ inclusion in building the country’s economy.
According to him, repayment agreement originates from a covenant made between the fund and the government during its establishment procedures in 1999.
“Currently, PSSSF pays Sh60 billion in pensions to retirees every month,” he said.
“It is the hope of the Ministry of Finance that the money will help in making timely payment of retirees’ benefits, monthly pension disbursements and increase the value of the fund once the funds are invested in business ventures,” he said.
Regarding the amount it owes in relation to development projects, Mr Tutuba said the government has paid Sh500 billion out of Sh724 billion to PSSSF after verification of the debt.
Mr Tutuba said the government would continue to allocate funds for servicing the debt in a sustainable exercise.
For his part, PSSSF director general Hosea Kashimba said the Sh2.7 trillion investment in securities will enable the fund to generate Sh120 billion revenue.
“PSSSF believes that implementation of this agreement will enable the fund to recover the Pre-1999 debt (prior to the establishment of the fund). Also, the amount will enable the Fund to fulfil its fundamental obligations to pay benefits to pensioners,” he said.
Mr Kashimba said PSSSF has opened regional offices that have been given more powers to address members’ challenges.
According to him, most of member claims would be processed at the regional offices.
He also said in the Fund’s efforts to improve the quality of services offered to its members, PSSSF has come up with PSSSF Mobile aimed at moving services between the Fund, employers and members at the highest convenience of all the stakeholders.