Members of Parliament have supported the bid by Rwanda Social Security Board (RSSB) to have more autonomy in its daily functioning, to be able to operate efficiently.
The new bill amending the law establishing Rwanda Social Security Board (RSSB) mandates the body’s board of directors to make decisions regarding its operations, but remains under the supervision of the Ministry of Finance and Economic Planning (MINECOFIN).
Some legislators contended that this provision implies that RSSB’s board has no full autonomy to make decisions because the supervising organ might recommend that its decisions be amended or dropped.
The bill seeks to make RSSB autonomous in the recruitment of staff, public tender and procurement, as well as making investment decisions, among others, which the institution said will help improve its operational efficiency and performance as well as allow competitiveness on local and regional markets.
Another element MPs said was lacking is that the bill makes the board liable for decision it makes, but does not hold the supervising organ accountable in case it has advised the board on its decisions.
Regis Rugemanshuro, RSSB Director-General. Photo: Sam Ngendahimana.
MP Emma Furaha Rubagumya asked why the decisions by the RSSB board have to be taken to its supervising organ for feedback, if the purpose is to make the pension body autonomous.
"When there is another organ supervising you, it means that there is a likelihood of that organ vetoing a decision you make, which defeats the purpose of the autonomy being sought,” she said.
According to her, since the board of directors understands the institutional policy, they should be allowed to make decisions such that they are immediately implemented.
Similar sentiments were echoed by MP Angelique Nyirabazayire.
"The proposal is to ensure the board makes swift decisions, but there is a provision that they will have to send those decisions to the supervising organ for approval,” she said, adding that this defeats the purpose.
In addition, Nyirabazayire said that RSSB has the mandate to promote social security which concerns all employers, including the Ministry of Finance and Economic Planning – its supervising organ.
"I would like to know the powers that it [RSSB] has been granted to set guidelines determining administrative faults and [impose] related penalties on its partners [entities in question] will be executed without conflict of interest,” she said.
The bill under review was scruitnised by the Parliamentary Standing Committee on Social Affairs.
While presenting the committee’s report on its analysis of the bill to the plenary sitting, the committee chairperson, MP Christine Muhongayire said that because RSSB has gradually been expanding, it should be granted the autonomy it needs in order to be able to fulfill its mandate.
She indicated that apart from the mandate to manage social security schemes, RSSB has also the responsibility to invest the funds to ensure the sustainability of the finances and long-term projects of the schemes under its management.
This, she said, requires a degree of oversight.
"It is good is that the supervising organ is informed about what is happening [RSSB] on a daily basis based on the decisions being made,” she said, pointing out that this will ensure cabinet is kept abreast of such developments, and advise RSSB accordingly.
Performance results
The Auditor-General (AG) report for the financial year 2018/2019 indicated that RSSB’s equity investments were underperforming and they did not bring direct return in form of dividend or capital gain to RSSB.
The report exposed that the loss of the value of invested funds was increasing, citing eight companies where the loss increased from Rwf19 billion in 2017 to Rwf28 billion in 2018 due to their poor financial performance.
Meanwhile, on Tuesday, September 22, 2020, RSSB Director-General Regis Rugemanshuro told the Public Accounts Committee (PAC) during a virtual hearing that that although there are areas where RSSB investments did not go well, there are ventures which performed well citing investments in Bank of Kigali, and treasury bills and bonds.
He was responding to mismanagement cases identified in the AG’s report for the financial year 2018/2019.
Overall, Rugemanshuro said, RSSB registered Rwf54 billion profits on its portfolio in the fiscal year 2018/2019, compared to Rwf47 billion in the previous year.