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The Socialist Party (SP) says the ruling United Party for National Development (UPND) will create a destitute society at retirement age for most Zambians through National Pensions Scheme Authority partial withdraw policy.
Party president, Fred M’membe, said the policy has been implemented without sufficient sensitization of the beneficiaries on the implications of partial withdrawal and most importantly what they should do with the money.
M’membe said moving funds from an investment account to a consumption account is not a wise decision.
He said no training has been provided or mentorship workshops administered to school the beneficiaries on how to re-invest the funds in higher return investments.
“Zambia is well known for lacking a savings and entrepreneurship culture, coupled with the existing harsh economic conditions prevailing, it is likely that the benefits will be used for consumption without creating future wealth,” M’membe said.
He said the NAPSA partial withdraw leaves the party confused at a policy level as to what government is trying to achieve.
M’membe recalls that in February this year, the Bank of Zambia (BOZ) increased the statutory reserve ratio to remove liquidity from the market in order to manage the rapid depreciation of the Kwacha and reduce the rate of inflation.
“We are told that NAPSA will payout K11 billion which means pumping liquidity into the market. The K11 billion liquidity being pushed into the market will more than offset the liquidity taken out by the Bank of Zambia’s decision,” he said.
Read More:Over K1 billion paid as pre-retirement benefits, National Pensions Scheme Authority says
M’membe said in a nutshell, one policy measure by the Bank of Zambia is being offset by NAPSA pumping additional liquidity in the market.
He said the two policy measures undertaken contradict and cancel each other out.
“We are also concerned that NAPSA is being used as a cash cow by government, to participate in government securities subscription, provide loans to foreign entities to construct the Ndola-Lusaka dual carriage way and now partial pension withdrawals,” M’membe said.
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