Annual general report of the controller and - Parliament of Tanzania

These few examples of the weaknesses in NSSF investments
need to be taken with special weight. This is due to the
fact that if you analyse the loans that have been advanced
to various parties, most of them have proved to be non
economical but attracting lawsuits which keeps the Fund’s
management busy. To secure the members funds, NSSF
should review its investment procedures and the
investment department ensure that funds are used
efficiently rather than being tied up in uneconomical
investments.
9.11.6 Debt Swap Agreement between the NIC and
Government-Shs 4,428,674,047
The Government had in previous years provided loans to
the Corporation in order to meet its urgent obligations.
The outstanding loan balance as at the beginning of the
year was Shs.4,428,674,047.
At its 185 th Board meeting held on 10 th July, 2007, it was
reported that the Government was intending to use the
loan of Shs.4.4 billion it had given to NIC in 2005 to acquire
the Insurance Training Centre at Mikocheni at its Market
value of Shs.2,873,118,900 and that the Government would
write off remaining debt of Shs.1,555,555,146.
A Debt Swap Agreement was signed in November, 2007
between the then Ministry of Finance and NIC whereby the
Government acquired the Training Centre at a value of
Shs.2,873,118,900 and according to the Agreement the loan
balance of Shs. 1,555,555,146 was to remain.
However, in accordance with management representation,
an agreement (said to be executed soon) has been reached
with the Government to offset the loan against a revalued
figure of Shs.4,015,000,000 for the Training Centre.
Consequently, the amount of the loan has been offset with
Shs.4,015,000,000 to arrive at a new loan balance of Shs.
413,674,047. Although the said new agreement has not
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Office of the Controller and Auditor General PA&oBs 2007/08 188