The government agency in charge of administering the pensions of private sector employees is eyeing investment in the securities exchange as attempts to gain a foothold in Addis Ababa’s lucrative real estate stall.
Abate Mitiku, head of the Private Organization Employees’ Social Security Administration (POESSA), informed lawmakers about the agency’s investment ambitions while the National Bank of Ethiopia (NBE) was presenting its half-year performance report to the parliamentary Budget and Planning Committee on Monday.
Both the public and private pension funds are accountable to the central bank.
“We are currently conducting studies to invest in the capital market,” Abate told MPs.
An amendment to POESSA’s establishment proclamation from three years ago lifted a restriction limiting its investment portfolio to treasury bills and government bonds. Since then, the Administration, which registered nearly 29 billion Birr in income in 2024/5, has been attempting to invest in the real estate sector.
However, its efforts have faced high hurdles in the Addis Ababa City Administration, according to Abate.
“Following the amendment, we planned to make big real estate investments across all districts of Addis Ababa. We submitted a request for land with the mayor’s office. The [POESSA] proclamation allows us to access land without payment, but despite repeated requests, we haven’t been able to secure land for projects,” said Abate, asking for lawmakers and other government officials to intervene.
Meanwhile, the Administration seeks to invest in the capital market as a way to diversify its portfolio, which sits at 183 billion Birr invested and yielded 14 billion Birr in profits last fiscal year.
Abate also reported that protracted conflict in the Amhara and Oromia regions is limiting the Administration’s ability to collect pension payments.
“Our branches and divisions in all other regional states and city administrations have met their targets in the past six months. Only Amhara and Oromia are facing setbacks. We could not collect as much as planned for these two regions,” he told MPs.
Nonetheless, the Administration registered 25.8 billion Birr in income over the past six months, netting 10.8 billion birr in profits from investment returns. During the past six months, the Administration paid 1.5 billion birr for nearly 3,500 pension beneficiaries. During the same time, POESSA registered 135,000 employees working in 19,700 private organizations.
The report also shows the Administration managed to recoup 607 million Birr of the 861 million Birr a 2024/5 audit discovered in uncollected pensions, with the remainder remaining uncollected owing primarily to security issues.
The Administration targets registering 281,000 new employees from 18,000 private organizations this year, with its managers eyeing 55 billion Birr in collections and 20 billion Birr in investment profit.
