Tanzania parastatal savings fund eyes $1.2 billion

News 

Monday, March 10, 2014 

BY KENAN KALAGHO, EACT AFRICAN BUSINESS WEEK, KAMPALA UGANDA

EYEING THE FUTURE: Mollel said most of the money raised would go into local real estate development.

DAR ES SALAAM, Tanzania - The Tanzania Parastatal Pension Fund (PPF) is planning to raise its capital to $1.2 billion (about Tsh2 trillion) from the current $799 million by the end of 2015.
This would allow the Fund to be a major investment vehicle in Tanzania.
According to sources the money will go to servicing plots and real estate projects.
Eventually this will allow members and especially civil servants, to access descent homes through loan acquisition.
Speaking in Dar es Salaam last week, the PPF Member Services Manager Godfrey Mollel said in order to realize such a dream the firm is planning to enroll 400,000 members by 2015.
 He said this will enable PPF to implement much of the projects currently on the drawing board.
Mollel said, “With the increase in number of our members, we shall embark on houses construction in order to let our members own their own houses.”
 According to TanzaniaInvest.com website, developments within the construction sector have benefited the Tanzania real estate sector through the creation of additional real estate space.
This is despite the fact that real estate sector has not made significant contributions to the GDP in recent years.
However, the government remains optimistic with the recent planned developments that it will contribute to the growth of the sector. Currently Tanzania’s largest market for investors in the real estate sector can be found in office development.
Knight Frank, a UK-headquartered global property consultancy ranks as one of the major real estate managers in Tanzania.
Mollel said in recent years there has been considerable development in housing, which gave PPF a sound direction for investment opportunities.
“Currently we offer traditional benefits that includes old age, death survival, sickness, gratuity, withdrawal, education as well as deposit administration scheme benefit which involves interests and annuities of employers or employees,” he said.
However he said there was still much misinformation about pension funds in the country.
The Tanzania Pensions Fund is amongst the major pension funds in Tanzania.  It was launched in 1978 with an aim of offering old age and other benefits to its members.