Martin Tarusenga, the General Manager of Zimbabwe Pensions & Insurance Rights, has called upon pension funds to extend equity pension/insurance funds investment policies to cover bakers.
by Donald Chidoori
The call comes after the Minister of Industry, Commerce and Enterprise Development, Dr Mike Bimha, resorted to calling in bakers and other stakeholders to negotiate a price reduction in bread, after the country’s major bakeries had arbitrarily increased prices.
Mr Tarusenga said such negotiations were tantamount to price controls and would not be sustainable in the long run, especially if one bakery has more than 80% of the market share of bread.
He said the monopolistic behaviour shown by the country’s bakers when they arbitrarily increased prices, could only be cut in the bud if small scale bakeries were capacitated enough to compete with the large scale bakers.
He said capacitating small bakers as opposed to price controls, was a long run economic principle to resolve the bread price hikes. He stated that empowered small bakeries would increase the supply of the bread which would in turn result in price reduction.
Writing an opinion piece in the country’s leading daily newspaper The Herald, Mr Tarusenga called upon the Insurance and Pension’s commission to come up with polices that would direct pension funds to organise a capital or loan facility for small scale bakers.
“Such a facility should be supported by focused baker training courses and institutions – yes Minister, those kneading machines should be produced locally without excuse,” said Tarusenga.
“It should not take the Minister (through the Insurance and Pension Commission) two (2) months to organise the capital/loan facility, to transparently identify at least twenty (20) fit and proper candidate producers.
“The successful candidates should be subject to rigorous performance assessment to ensure that this policy intervention is successful. And a year should be enough for the Minister to realise kneading machine production, enough even for export to SADC countries for starters,” he added.
In May this year Ipec revealed that Zimbabwe is sitting on pension fund assets worth close to $10 billion.
The assets are divided into four main categories – the compulsory scheme administered by the National Security Authority (NSSA), the Public Service Pension Fund, Voluntary Occupational pension funds and personal pension funds.
According to Ipec assets under public sector schemes are worth $6 billion, with $2,9 billion under private occupational schemes and $100 million under private individual policy schemes. The state run pension fund NSSA is reportedly sitting on a $1,3 billion fund.
Which Tarusenga argues should be used to support the country’s ailing and small scale industries.
Pension Funds are now playing a critical role in advanced and developing economies, it is also time Zimbabwe looks at how it can make the most of on the retirement savings to capitalise small scale bakers says Tarusenga.