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 the 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 case study design. Data collection methods and instruments used were questionnaire, 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 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 showed 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 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.
It is therefore recommended that, the government should provide more support to ensure that these pension funds, (NSSF included) achieve the vision of Tanzania to be among semi-industrialized countries in Africa.
