x Abu Dhabi, UAETuesday 25 July 2017

Zimbabwe finds little rest in retirement

After the years of out-of-control inflation, economic stability is returning - but the retired have been left on the breadline.

BULAWAYO, ZIMBABWE // After 34 years of loyal service with the National Railways of Zimbabwe, Nkosana Moyo could be forgiven for wanting to kick back and enjoy his retirement with his family. Instead, thanks to an economic disaster that has engulfed his country for the past 10 years and wiped out people's pension contributions, the 61-year-old has been forced to lease his house in Bulawayo, move out to the countryside, and is planning to take up farming. "I thought after working for 34 years I would rest," he said. "There is nothing like that. I am starting a new life of hard work, like I never worked before." While figures are not available, it is believed Mr Moyo is just one of tens of thousands of Zimbabweans facing a retirement of hardship after their pensions went up in smoke. Spiralling inflation under Robert Mugabe's administration, which reached 230 million per cent in July 2008, made it impossible for pension funds to invest meaningfully. When the new government, formed under a power-sharing agreement between Mr Mugabe's Zanu-PF and Morgan Tsvangirai's Movement for Democratic Change, abandoned the Zimbabwe dollar for multiple foreign currencies in January, the worthless local currency contributions pensioners made during their decades of work - at a statutory rate of 7.5 per cent of their salaries a month - were converted to US dollars and their investments effectively evaporated. When he retired in July, Mr Moyo was given a US$1,500 (Dh5,500) lump sum pension payment. He is also entitled to a monthly pension of $25 but since July he has not received any money. With little left, he moved from Bulawayo to his rural home in Filabusi, 80km to the east, where he now stays with his wife and seven grandchildren. "I used the lump sum to buy 10 cattle and some groceries and it was finished," Mr Moyo said on a recent visit back to Bulawayo to check on his $25 payment from the National Social Security Authority (NSSA), the statutory body that pays out pension money. "I am waiting for the $25 monthly payment from NSSA but since July I haven't got anything. I get the sense that I am wasting money on bus fare from Filabusi to look for money which isn't there." Because the pension is too little, he said, he has no time to rest and hopes his new life as a farmer will earn him a living. Everisto Kondo, 78, a former chef from Bulawayo, said the economic crisis has rendered him a beggar, 13 years after his retirement. "Upon my retirement, the money was enough to buy a house and a modest car," he said. "Now it is nothing. I live on handouts. It is painful because our pension contributions helped build some of the best office blocks in Bulawayo. I wonder where the money went." If it was not for his four married daughters who pay his bills and buy food for him and his wife, Mr Kondo said things would be a lot worse. In February, Britain, Zimbabwe's former colonial ruler, reacted to the adverse impact of the economic crisis on pensions and started an emergency operation airlifting 500 British nationals residing in the country to London. The resettlement package came as increasing numbers of Britons approached the British Embassy in Harare asking for help to survive or to leave Zimbabwe. Philemon Chereni, the NSSA public relations manager, said the authority recognises that the payments are far below the breadline of $550 a month according to recent figures from the Consumer Council of Zimbabwe. "We are working on the basis that the economy will continue to improve and we will also improve the benefits. Inflation played havoc and it was a challenge for the pension sector to remain relevant," Mr Chereni told The Sunday Mail, a local government-run weekly newspaper. He said contributors should understand that the NSSA was a complementary scheme to other savings they would have made. Last year, when the economy was at its worst, many pensioners stopped collecting their payments as the cost of travelling to banks to withdraw the money was higher than the payouts. Even the introduction of multiple foreign currencies has not brought the immediate respite pensioners expected. Old Mutual Zimbabwe, one of the country's biggest pension funds, has proposed that pensioners getting less than $20 per month be paid a one-off lump sum of $2,000 each. "Further to our earlier communication in April 2009," said Old Mutual in a recent letter to pensioners, "we advise that, the exercise of determining your pension value in US$ has been completed. The monthly determined is less than $10 and therefore expensive for you to collect on a monthly basis. To this extent a lump-sum payment which is much higher when compared to monthly pension that would have been payable would be made." Davies Sibanda, the managing director of the Bulawayo-based Stratways Management Consultants commended pension funds for making the disbursements, immediately after a long economic crisis. "But I disagree with pension funds that are proposing lump payments," he said. "Pensioners will take them out of desperation. Six months later the money is finished. Because they took all their pension, it means they are destitute. Pensioners must reject the lump payments and be patient because the economy will improve and payments will be increased." foreign.desk@thenational.ae