Pensioners whose retirement contributions were eroded during the height of Zimbabwe’s dollarisation in 2009 are set to receive compensation for the loss in pension value. Speaking at the Insurance and Pensions Commission (IPEC) media awards ceremony in Harare on Wednesday, Finance and Economic Development Minister Professor Mthuli Ncube announced that the framework for compensation has been completed and that regulations guiding the exercise are awaiting gazetting.
“The insurance and pensions industry is grappling with low confidence because policy‑holders and pensioners received low values after the adoption of the multi‑currency system in 2009,” Ncube said. “I am pleased that the finalisation of the compensation exercise, as recommended by the Commission of Inquiry into the Conversion of Insurance and Pensions Values from the Zimbabwe dollar to the United States dollar, is almost done. It is the government’s expectation that IPEC and the industry will expedite the compensation exercise as soon as the regulations are gazetted. Compensation for the 2009 losses will go a long way in restoring confidence in insurance and pensions. We therefore need to work together and implement this exercise for the future sustainability of the insurance and pensions industry.”
Ncube stressed the importance of the insurance and pensions sector to national development, noting that it falls under the Macro‑Economic Stability and Financial Re‑Engagement National Priority Area of the National Development Strategy (NDS 1). “As outlined in NDS 1, the insurance and pensions industry, which is part of the financial sector, plays a crucial role in ensuring sustainable growth by mobilising savings, directing funds into productive sectors, managing risks, allocating resources efficiently, and facilitating the delivery of products and services,” he said.
He added that government records show the pensions and insurance sectors invested ZW$74 billion and ZW$41 billion, respectively, in prescribed assets in 2022—amounting to 7 % and 9 % of industry assets. “These levels are below the prescribed thresholds for the insurance and pensions industry, which is regrettable. I call upon the sector to comply with this statutory requirement. There is no justification for continued non‑compliance, especially now that the government confers prescribed‑asset status even on private equity of national importance,” the finance minister concluded.
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