SSNIT’s $185 million locked up in housing projects – Auditor General’s report

It has come to light that the Social Security and National Insurance Trust (SSNIT) has an astounding amount of about USD 185 million locked up in a housing project in the Greater Accra Region.

The revelation was made by the Auditor General’s office in its Report of Public Accounts of Ghana – Public Boards, Corporations, and Other Statutory Institutions for the year ending December 31, 2019.

The report was put together after several public Boards, corporations, and other statutory bodies had their accounts audited by the Auditor General.

The report, which covers over 1,000 pages, states that SSNIT had invested a large sum of money into a housing project at two locations- Klagon and Sakumono- but it seems the investment did not yield any substantial returns.

This step was in sharp contrast to the dictates of Section 91 (1) of the Public Financial Management Act, 2016 which urged all public corporations to “ensure the efficient management of the financial resources of the public corporation including the collection and receipt of money due to that public corporation.”

Page 81 of the document reads that:

“In spite of the provision of Section 91(1) of the PFM Act 2016, Management of SSNIT sunk a cedi equivalent of US$185,250,000.00 in a housing Project at Klagon and Sakumono. The Project is halted and it is being managed by RSS, a Joint Venture Company belonging to SSNIT and RegimanuelGray.”

The report goes on to say that the Auditor General’s office advised SSNIT to heed a recommendation from RSS on the need to rent out the houses in order to minimize what was being lost on the project.

In fact, the report said that after a visit by the Auditor-General’s Department, it came to light that “out of the 32 completed housing units, only two of them were sold. Also, none of the 9 flats completed blocks at Klagon, Sakumono site was sold.”

What did the Audit-General say?

The Auditor-General concluded that “no due diligence was performed on the investment, the inability to anticipate the increased supply of houses in the housing market, coupled with the wrong estimation of the project cost resulted in this state of affairs. Over US$185,250,000.00 of Pensioners’ funds has been locked up in the investment.”

The report concluded on the matter by asking SSNIT to set up proper ways of looking at projects of the same nature going forward.

“We urged the Board to consider RSS’s proposal to rent the houses to reduce the losses on the investment. We further recommended to the Trust to institute an effective project evaluation process in investments of similar nature.”

Per information on SSNIT’s website, it has a 60 percent stake in RSS (with RegimanuelGray having 40 percent) and the project at Sakumono and Klagon is part of six that SSNIT has interests in across the country.

The other projects are at Switchback Road in Accra, Dunkonah, Sakumono, Borteyman, and Asokore-Mampong in the Ashanti Region.