The Social Security Investment Fund: A cornerstone of Jordan's economy

AMMAN – On Wednesday, Al-Ghad reported that since its establishment in 2003, the Social Security Investment Fund (SSIF) has achieved substantial returns while preserving the actual value of its assets and ensuring necessary liquidity to meet future obligations of the Social Security Corporation (SSC). 

According to Dr. Ezzeddin Kanakrieh, the SSIF CEO, the fund is the largest in Jordan, with assets reaching approximately JD14.9 billion by the end of 2023, constituting around 40 percent of the GDP at current prices.

Over the past 25 years, the SSIF has received significant royal attention, emphasizing the importance of enhancing the role of the SSC and its investment fund in providing social protection for citizens.

The SSIF’s assets are distributed across several investment portfolios, including bonds, equities, money market instruments, real estate investments, loans, and tourism investments. The SSIF’s equity portfolio accounts for approximately JD2.3 billion in 2023. As a long-term strategic investor, the SSIF focuses on companies listed on the Amman Stock Exchange (ASE), aiming for solid performance and optimal returns within acceptable risk levels.

Regarding financial performance, the SSIF’s assets have grown significantly since its inception, increasing from JD1.6 billion in 2003 to approximately JD14.9 billion by the end of 2023. The fund’s income, derived from various investments, reached JD225 million, with an evaluation increase in the strategic equity portfolio amounting to JD124 million. Additionally, SSC’s contribution surpluses contributed JD65 million to the growth.

During the first quarter of 2023, the SSIF’s income surged by 28 percent compared to the same period in 2022. This growth primarily resulted from fixed-income instrument portfolios, including JD133 million from bonds and JD59.4 million from the equity portfolio. Furthermore, the dividends from companies in 2022 reached a historical record of JD152 million, the highest since the fund’s launch.

The comprehensive income, representing both SSIF’s income and the evaluation of the strategic equity portfolio, increased to JD349 million in the first quarter of 2023, signaling a growth of 5.8 percent compared to the same period in 2022.

The SSIF remains committed to its investment policy, balancing risk-adjusted returns across different investment tools. The bonds portfolio constitutes 54.8 percent of the total portfolio, followed by equities at 18.4 percent, money market instruments at 13.7 percent, real estate investments at 5.8 percent, loans at 3.2 percent, and the tourism portfolio at 2.3 percent.

To enhance the competitiveness of the tourism portfolio, the National Tourism Co. for Tourism Development is undertaking various projects. These include managing the Amman Cham Palace, renovating the Crowne Plaza Hotel/Petra, and designing a new four-star hotel in Aqaba.

Additionally, the Al-Daman for Development Zones Company (DDC) continues to develop infrastructure and services in the King Hussein Bin Talal Development Area (KHBTDA) in Mafraq and the Irbid Development Area, attracting industrial and entrepreneurial investments. The current investments in both areas amount to 450 million dinars and have created 3,600 jobs.

Furthermore, the Daman Investment and Agricultural Industries Company (DIAI) manages a multiphase project in the Kingdom's southern region, covering 30 square kilometers. It currently contributes to local demand for strategic crops such as wheat, potatoes, and animal feed.

The SSIF invests in shares of over 50 public shareholding companies, including major national companies in sectors such as banking, industry, and services. These companies are known for their substantial financial positions, consistent growth rates, and commitment to annual cash dividends for shareholders.

The SSIF’s portfolio value of shares in public shareholding companies reached approximately JD2.1 billion by the end of 2023, constituting around 12.4 percent of the total market capitalization of the ASE.

The SSIF’s investment in the banking sector is a crucial focus of the ASE. This sector plays a vital role in the Jordanian economy by financing major economic projects, supporting small businesses, and investing in promising areas such as information technology, tourism, and renewable energy. Additionally, the banking sector is a significant employer of highly skilled local human resources.

The SSIF invests in 13 commercial and Islamic banks operating in Jordan, with varying ownership percentages. It also holds strategic investments in several major companies in the manufacturing sectors, including the Jordan Phosphate Mines Company (JPMC), Arab Potash Company (APC), and Lafarge Jordan Cement.

Furthermore, the SSIF invests in various public-shareholding companies in the services sector. Notable examples include the Jordan Telecom Group (JTG) and the Jordanian Free and Development Zones Group (JFDZ). Additionally, the SSIF has holdings in insurance companies and financial services providers.

The SSIF owns several five- and four-star hotels managed by the global Intercontinental Hotels Group (IHG). These hotels are supervised by the wholly-owned National Tourism Co. for Tourism Development, established in 1999 before the SSIF’s establishment. The SSIF also owns two hotels in Amman and Madaba and tourist lodges in prominent destinations across the Kingdom, including Aqaba, Ajloun, Jerash, Zai, Karak, and Wadi Rum. Jordanian investors operate these properties.

Dr. Kanakrieh highlighted the fund’s diverse investments in significant tourism projects through strategic partnerships with leading local companies in this sector. Notable investments include:

• Eagle Hills: The SSIF invests in Eagle Hills, which is involved in the Saraya Aqaba project.
  
• Zara Investment Holding Co.: The SSIF has stakes in Zara Investment Holding Co., which manages the IHG properties in Amman, Movenpick at the Dead Sea, Petra, and Aqaba.
  
• The SSIF holds shares in the Sheraton Amman Hotel.
  
• The SSIF invests in the Marriott Hotel at the Dead Sea.

In the energy sector, the SSIF diversifies its investments by participating in various projects, including:

• Oil refineries: The SSIF invests in the Jordan Petroleum Refinery Company.
  
• Electricity generation and distribution: The SSIF holds stakes in the Jordanian Electric Power Company (JEPCO) and the Central Electricity Generating Company (CEGCO).
  
• Renewable energy projects: The SSIF established and operates three solar power stations in Ramah, Ghor Kabed, and Zarqa. These stations provide electricity to SSIF buildings, General Social Security Corporation branches, and SSIF-owned hotels. Additionally, the SSIF is preparing to launch a fourth solar power station in the Shobak area to supply electricity to the Crowne Plaza Petra Hotel.

The SSIF also owns land and commercial complexes across various Jordanian governorates, with a total value of approximately JD845 million. The fund is actively developing and leasing these properties through long-term Build-Operate-Transfer (BOT) contracts.

Furthermore, in alignment with the royal vision to achieve food security for strategic crops, the SSIF established the SSC Company for Investment and Agricultural Industries in 2020. This company began operations at the end of 2021, focusing on green investments and supporting local agriculture.

Last year, the SSIF initiated the second phase of its agricultural project in the southern region of the Kingdom, specifically in the Mudawara area. The project encompasses an impressive 30 square kilometers and focuses on cultivating various crops, including wheat, table potatoes, industrial potatoes, silage corn, and animal feed.

Jordanian professionals working for the company efficiently manage and run the project. Additionally, the SSIF collaborates with local private-sector investors. This joint effort has resulted in over 110 job opportunities for engineers and agricultural workers, with 90 percent of these positions benefiting residents of the Mudawara area and other southern governorates. Furthermore, the project provides 80 seasonal job opportunities, with 50 percent of these roles allocated explicitly to local women.

In 2009, the SSIF established the “Guarantee for Development of Development Areas Company.” This wholly-owned company serves as the investment arm of the SSIF, focusing on developing infrastructure, services, and marketing in specific economic development zones. These zones include the KHBTDA in Mafraq and the Irbid Development Area, which were declared as special economic development regions through royal initiatives.

The SSIF’s investments in these areas are diverse and strategically aligned with the national vision. Here are some key highlights:

Irbid Development Area:

• The SSIF owns 80 percent of the capital of the Irbid Development Zone, which is actively developing the KHBTDA. This area spans 21,000 dunams and primarily focuses on various industrial sectors, including logistics services and renewable energy.

Solar Energy Projects:

• The SSIF has invested in four solar energy projects with a total capacity of 175 megawatts and an investment size of approximately JD165 million. These projects have created around 200 permanent job opportunities during their implementation phase.

North Development Area in Irbid:

• The SSIF wholly owns the Northern Development Company in Irbid. This company plays a pivotal role as the primary developer of the KHBTDA across an area of 1.8 square kilometers. Investments in this area primarily focus on technology, telecommunications, and support services. To date, the area has attracted eight investments totaling JD40 million, providing 2,300 permanent job opportunities.

In 2016, the SSIF established the Guarantee for Leasing Company to finance major infrastructure projects across various governorates in Jordan. These projects span sectors such as health, transportation, and services. Additionally, the SSIF contributes to creating training and employment opportunities.

The company provides funding for several significant projects, including:

• Tafila Governmental Hospital: Opened in 2022, this hospital has a capacity of 150 beds.
  
• Amman Customs Center project in Madouneh.
  
• Ma’an Military Hospital: With a capacity of 150 beds.
  
• Bus Rapid Transit (BRT): This project connects Amman and Zarqa efficiently.

The pharmaceutical industry is valuable for the Jordanian economy, contributing to research and development. Recognizing its importance, the SSIF holds strategic shares in leading pharmaceutical companies such as Hikma Pharmaceuticals and Dar Al Dawa (DAD). Additionally, the SSIF invests in around 80 public and private joint-stock companies, with 119 representatives serving on their boards and management bodies. Notably, 13 percent of these representatives are women.

The SSIF supports these companies by enhancing their developmental role through financing innovative projects, supporting small businesses, and promoting corporate social responsibility initiatives and sustainable development.

The SSIF emphasizes corporate governance standards and effective control mechanisms. Regular specialized meetings are held to enhance the skills and capabilities of board members, keeping them informed about legislative developments, local and global economic updates, and best practices in corporate governance and prudent management.

Since 2018, the SSIF has also established a Corporate Social Responsibility (CSR) framework, defining strategies and practices to contribute to economic, social, and environmental development.

To contribute to responsible investment and participate in the comprehensive national update project, the SSIF has incorporated sustainable development goals into its 2022–2024 strategic plan for the first time. These goals include economic growth, decent work, poverty eradication, gender equality, women’s empowerment, climate action, and clean energy.

Since 2017, the SSIF has voluntarily published sustainability reports. These reports highlight financial, institutional, environmental, and social sustainability achievements. The SSIF practices responsible resource consumption by minimizing paper, water, electricity, and fuel usage. This commitment reflects the fund’s ethical stance and transparency, emphasizing the impact of its activities and investments on both social security and the overall national economy and their effects on the environment and society.

In 2018, the SSIF introduced the “Empowering Women Document” as part of its corporate social responsibility framework. This document aims to enhance the skills and capabilities of female employees, enabling them to excel in their roles and advance equally within the organization alongside their male counterparts.

During 2022, the SSIF actively participated in the Women’s Empowerment team, a subgroup responsible for implementing the Economic Modernization Vision (EMV). The SSIF proposed initiatives to increase women’s economic participation, support women-led projects transitioning from the informal to the formal economy, and create an enabling environment for women to assume leadership roles in the private sector.

The SSIF’s investments span various vital sectors of the national economy, including banking, mining, tourism, telecommunications, traditional and renewable energy, pharmaceuticals, agriculture, development areas, and real estate. Additionally, the SSIF finances infrastructure projects through leasing arrangements.

These investments enhance the fund’s portfolio value, ensure financial sustainability for social security, stimulate economic activity, create quality employment opportunities, and contribute to comprehensive sustainable development.


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