Abstract:
A research was carried out to assess the contribution of pension funds in industrial
sector development in Tanzania was done at NSSF headquarters, whereby 60
respondents participated. The general objective of the study includes determining the
role of pension funds in industrial sector development. Whereas, specifically the
study identified the contribution given out by those pension funds to develop
industries, look out the techniques and strategies applied by pension funds in
developing the industrial sectors and to check out challenges faced by the pension
funds in performing the development functions to support the industrial development
in the country. The research methodology used was a case study design. Data collection
methods and instruments used were questionnaires, interview and documentary
review. Analysis of data was done using Statistical Package for the Social
Sciences (SPSS) and Stata.
The study applied descriptive statistics technique and inferential statistics through
Probit regression. Findings revealed that, NSSF provides different types of
contributions. These include issuing of loans for the expansion of companies which
existed, buying shares for those industries listed under the DSM Stock Exchange,
through owning industry by NSSF, NSSF with other partners to support Small and
Medium Enterprises (SMEs) industrialization and buying materials/products
produced internally so as to expand the market. Moreover, the study findings unveiled
that, NSSF uses asset-liability management strategy (ALM) to enhance the industrial
sector progress at large. In the same vein, it was shown that political influence, low
return on those investments, lack of accountability, efficiency and prudent investment
decisions, lack of financial sustainability were identified to constrain NSSF in the
contribution of industrial development in Tanzania. The study, therefore, establishes
that NSSF play an important role in the contribution of industrial sector development in
Tanzania. The findings showed that almost NSSF has invested more than 50 billion
to support industrial sector development.
