Mozambique’s INSS reviewing investment policy of US$300 M portfolio

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Mozambique’s INSS reviewing investment policy of US$300 M portfolio

11:44 CAT | 24 Feb 2016

TVM / Alfredo Mauaie director of INSS

Mozambique’s National Social Security Institute (INSS) is reviewing its investment policy, to establish guidelines as to where the money from workers’ and employers’ contributions should be put in order to ensure the best returns.

Speaking at a Maputo press conference on Tuesday, the INSS general manager, Alfredo Mauaie, announced that the INSS has established certain principles to be taken into account when drafting the new investment policy, including the need to diversity investments.

Currently the portfolio of INSS investments is around 300 million US dollars. Almost two thirds of this (64 per cent) is in deposit accounts in various banks. 21 per cent is invested in real estate, nine per cent in shares in companies, and six per cent in bonds.

Mauaie said that dispersing and diversifying investments is crucial as a risk mitigation strategy.

The new INSS management, in office since late 2015, has taken as its priority a survey of all the existing investments. Some are producing a regular return, said Mauaie, some are not producing income with the desired regularity, and others ought to be reassessed because the returns are not satisfactory.

The management will take its findings to the Board of Directors as the body with the power to take decisions on investments.

The INSS will continue to invest, said Mauaie, but that investment is not an end in itself, but a means to ensure that the INSS can honour its commitment to pay pensions and other benefits.

“The INSS must not be diverted away from its main focus”, he said. That meant that the INSS should not be directly managing its real estate investments. It was looking for a partner to handle this end of the business.

“We don’t want our attentions to be diverted into managing buildings”, he said. “That is not the focus of our activity”.

On particular problem is the site in downtown Maputo where new head offices for the INSS are to be installed. The job was embargoed after a scaffolding collapse in July 2015, in which five workers died.

Mauaie said the INSS will not interfere in the construction work since it has no direct link with the contractor. The building site is owned by the company JAT-Constroi, and it was JAT which hired the contractor, the Portuguese company Britalar.
“The process should go through the normal procedure”, said Mauaie. “The INSS has a connection with the company (JAT) which has the ie with the contractor, It is this company which should ensure that the building is completed under the terms agreed. Clearly, since this is going to be INSS offices, the institution must look after its interests in terms of quality. So the INSS has somebody there who is following the work”.

Source: AIM