Munyes destroys NSSF goodwill

Within a month, Labour Minister John Munyes has single-handedly laid to waste NSSF efforts to redeem its image.

A consistent public relations campaign by NSSF (National Social Security Fund) in the past several years had succeeded in changing Kenyans’ perception of the state-controlled pension fund.

By the middle of this year, NSSF was winning awards for good performance. For the first time in history, the Fund published its financial reports in the press. Also for the first time, an Annual General Meeting was held, bringing together workers, trade unions, the government and the media. In short, the Fund had recovered from the legacy of past corruption.

Then along comes John Munyes. With one sweep of his ministerial powers, Munyes has sucked NSSF into the political black hole. Since dismissing Managing Trustee Rachel Lumbasyo, and replacing her with an acting Managing Trustee, things have changed at NSSF. Decision making has been hindered as two antagonistic camps have emerged within the Fund.

Politicians have joined the fray as billions of shillings contributed by Kenyan workers present easy pickings. Not forgetting the possibilities of jobs for relatives and lucrative procurement tenders.

The ODM-PNU coalition tussles have reared their head at NSSF as either side is claiming the post of Managing Trustee as its fair share of the 50-50 Grand Coalition deal.

This month alone, NSSF has received lots of damaging publicity thanks to Munyes. As any marketing strategist will tell you, it takes a long time to build trust but only a few minutes to tarnish a reputation.

By the mid 1990s, NSSF was virtually bankrupted by extortionist deals made by well-connected personalities. Individuals would use their proximity to President Daniel arap Moi to get public land almost for free. Within days, the same plots of land would be sold to NSSF for hundreds of millions of shillings. Considering the political climate at the time, NSSF had little choice over the matter.

That explains why NSSF ended up purchasing abandoned quarries at Embakasi. However, the Fund managed to sell the plots to city residents eager to invest in housing.

Prominent lawyers made millions of shillings by providing legal services to the Fund. Whether by design or accident, the lawyers were assigned cases related to fellow well-connected individuals, mostly from Moi’s KANU party.

During the late 1990s, with the Fund facing a financial crisis, the government decided to employ professional managers in a bid to secure workers’ contributions. Individuals such as David Masika and Jos Konzolo played a key role in stabilizing NSSF finances. From the year 2000 until the present moment, there was a dramatic reduction in financial scandals at NSSF. The only major scam was a Shs250 million deposit with Euro Bank which led to the dismissal and prosecution of former Managing Trustee Ben Mtuweta.

With time, NSSF has improved its payment record and retirees get their cash within days from district offices. Information Technology capacity has been enhanced, though there’s room for progress.

The Fund’s financial situation is vastly improved with steady income from its investment in shares, real estate and government securities. NSSF is a significant shareholder in Kenya Power & Lighting, National Bank and other well-known companies.

Recruitment for a new Managing Trustee is underway but with the Labour Minister itching to exercise his powers, whoever gets the job will continually be seeking approval before making key decisions.  For millions of Kenyan workers painstakingly saving for retirement, developments at NSSF cannot be good news.


Raila succumbs to ODM job promises

Kenyan Prime Minister Raila Odinga, must be ruing that day in December when he promised top government jobs to the ODM rank and file.

“The government is very big and there are enough jobs for everybody in ODM,” said Raila in Kiswahili when he was running for the presidency. ODM aspirants who had lost the party primaries would be employed in the civil service, diplomatic corps, judiciary, security services and state-owned corporations.

It is because of this promise that rumbles are being experienced not only in the civil service but within the ODM party. Its obvious that some people currently in top public positions will have to give way to political appointees. On the other hand, its also rather obvious that there are only limited positions to be distributed among ODM hopefuls.

Matters are made worse by the fact that ODM is in a coalition with President Mwai Kibaki’s PNU and Vice President Kalonzo Musyoka’s ODM-Kenya. They are all eyeing the top jobs in order to reward their own followers.

Its largely because of delays in awarding government jobs that ODM is experiencing a crisis. Indeed, the Grand Opposition of legislator Abaabu Namwamba is a product of politicians disappointed at being left out of the cabinet. Amidst growing dissent, ODM is moving fast to assuage discontent within its masses.

With impending retirements and reshuffles within the public service, the party may have found the opportunity to deliver on its December promise. Top jobs at the Kenya Revenue Authority, KenGen, Posta among other large state-controlled organizations are up for grabs. The party also wants to appoint permanent secretaries, diplomats, military commanders and judges. Already, ODM friendly lawyers are lobbying for the removal of Chief Justice Evans Gicheru.

Recent changes are a pointer of things to come. Kenya Ports Authority’s Abdullah Mwaruwa was retired last month and a replacement is yet to be found amidst lobbying that the job should be taken by someone from a coastal ethnic group.

At the Rift Valley Railways, South African Roy Puffet, was fired and his seat given to ODM backer, Mr Brown Ondego. Meanwhile, the government declined to extend the contract of a Canadian chief executive at the Kenya Power and Lighting Company. Mr Don Prescott’s job went to a Kenyan from the president’s ethnic group.

Last week’s debacle at the National Social Security Fund (NSSF) over its chief executive provided a glimpse of the tussles within government over political appointments. Labour Minister, John Munyes, used corruption allegations to dismiss NSSF Managing Trustee, Mrs Rachel Lumbasyo. The Labour Minister immediately appointed Mr Fred Rabong’o in her place.

The decision was met with uproar by NSSF’s staff. While Mrs Lumbasyo had spent years at the corporation before her appointment as Managing Trustee, Mr Rabong’o is a public relations consultant with no known experience in pension funds administration.

NSSF’s board of trustees, consisting of the Central Organization of Trade Unions (COTU) and the Federation of Kenya Employers (FKE) immediately rejected the appointment by Munyes. The situation became complicated because a Managing Trustee in NSSF cannot make decisions without the approval of COTU and FKE.

The matter went to Raila’s office at Treasury Building and it was resolved that Mrs Lumbasyo complete her term at NSSF. However, almost immediately, Raila overturned the consensus and sent Mrs Lumbasyo packing. Raila instructed Munyes to recruit a new Managing Trustee in coming months. Canvassing for the job among the pool of political appointees is in high gear.

Within the same week, the government swept out the command of Kenya Prisons and replaced it with outsiders. The new prisons commissioner, Mr Isaiah Osugo, was an officer with the Criminal Investigations Department (CID). He will be assisted by former Administration Police commandant George Macgoye. Reaction from prison warders has been muted so far. The warders went on a mutiny several months ago protesting poor housing and corrupt leadership.

The Kenyan people are concerned that politicians are sacrificing merit and technical ability for the sake of pleasing their cronies. Truth is that the ordinary Kenyan is unlikely to get a civil service job any time soon. Majority of people whose names are being floated for top government jobs are individuals who were in public service since independence and who were previously fired for mismanagement.

It is these same individuals that are responsible for Kenya’s downturn as indicated by depressing economic and social statistics. State corporations took a downward plunge from which recovery has been difficult, if not impossible.

A large percentage of candidates being mentioned for political reward appointments have been implicated in corruption scandals that led to the collapse of strategic organizations. The irony is that these individuals are extremely wealthy and they don’t really need their old jobs back.

It appears that political appointees will get their wishes while qualified and hardworking citizens stagnate in the morass of unemployment. For such is the state of Kenya.

NSSF staff angry over wasteful computerization

As Kenya finally starts to embrace e-government, officials at the National Social Security Fund (NSSF) seem to have discovered a new loophole for siphoning pension funds by over-doing computer projects.

Social Security House, completed in 1994.

Social Security House, completed in 1994.

The NSSF has spent hundreds of millions on computer servers, hardware and software upgrades with little to show for it. In many cases, information technology (IT) projects are scrapped soon after they are implemented and quickly replaced with other projects without any consideration for costs.

A couple of weeks ago, the NSSF launched its service charter which was, among other things, to commemorate the re-birth of the organization in terms of accountability and customer-friendliness. Concerned employees of the NSSF say the uncovering of a fresh scandal could frustrate their efforts at reforms.

“In 2005 NSSF bought 28 HP servers that were delivered directly to selected branches, bypassing the procurement office,” an NSSF staffer told the Nairobi Chronicle, “one year later the servers were recalled to Nairobi to have software installed. It was then realized that a hardware upgrade was necessary and this was done at a cost of about Kshs. 1,000,000 (US$15,000). This took about six months. After one and a half years, the servers had not been used.”

According to the employee, whose identity we cannot disclose for obvious reasons, NSSF bought over 30 SUN servers in 2007. “SUN servers are so expensive, they are only manufactured on order; and only very rich companies can afford them,” narrates the whistle-blower.

Soon after delivery it became apparent that the SUN servers could not be used. There was nowhere to install them. They had to be put in racks to wade off suspicion. Some were stacked at the NSSF building in Bruce House, away from preying eyes. They were carried there by NSSF staff in a NSSF lorry and locked in a room on the 13th floor. To this day, it has not been possible to use them. To be able to utilize these equipment; NSSF requires an additional Kshs.50,000,000 to Kshs.100,000,000 ($746,000 – $1.4 million).

Still within the past one year, the NSSF bought and installed internet phones in order to cut down on telephone bills across its national branches. Nothing wrong there, if it wasn’t for the fact that the Fund had already bought 40 PABXs for almost all its branch offices at an average cost of about Kshs350,000 ($5224). Telecommunication experts say the new internet phone system installed by NSSF requires greater manpower, in addition to congesting the computer network. In order to free up network bandwidth, the NSSF has been forced to shift some of its operations away from the network, a decision that defeats the purpose of e-government.

In spite of these irregularities, the purchase of more computer equipment continues at the Fund. Concerned employees are considering blowing the whistle to the media and to the Kenya Anti-Corruption Authority before the scandal brings down the giant organization.

NSSF made news throughout the 1990s for buying land at exorbitant rates from  people close to the government of former president Daniel arap Moi. The NSSF also lost millions of shillings in legal fees to well known lawyers some of whom are serving in the cabinet of President Mwai Kibaki. Being the biggest pension and provident scheme in Kenya, and controlled by the State, NSSF funds are a big temptation to Kenya’s cruel, corrupt ruling elite.

Since the late 1990s, increased competition from private pension schemes has resulted in reforms being undertaken by NSSF management. It became necessary for the fund to sell its holdings in land and buildings in order to conform to regulations of the Retirement Benefits Authority. NSSF has also intensified its efforts at recruiting new contributors and today encourages the self-employed to join through a flexible payments program.

Unlike in the past, NSSF invests in government bonds, treasury bills and shares at the Nairobi Stock Exchange. NSSF is a significant shareholder in such companies as National Bank, Kenya Power & Lighting, East African Portland Cement, among other big corporations of Kenya.

Through its reform programme, the NSSF has gained financial stability, enabling it to pay retirees on time. However, fresh revelations of improprieties concerning the purchase of computer equipment are bound to frustrate the reform efforts of the new millennium. Just goes to prove the famous saying that old habits die hard.