PHOTO: When the then Fund’s Managing Director Richard Byarugaba was honoured with a medal at last year’s International Labour Day. He was recognised for steering the Fund into a multi-trillion entity & increasing social security coverage in the country
STORY BY:
MOSES MUGALULA
PARLIAMENT
RICHARD Byarugaba, the former Managing Director of the National Social Security Fund (NSSF) has refuted claims of mismanagement of the Fund as alleged by Hon. Betty Amongi Akena, the Minister of Gender Labour and Social Development.
Byarugaba was on Friday 3rd February, appearing before the select Parliamentary committee investigating mismanagement claims at the Fund with focus on issues like corporate governance of the Fund, appointment of the Managing Director and safety of savers’ money.
He told the committee that the Fund’s performance had improved in the last ten years, growing at a higher rate than the national GDP. “In 2012 the Fund was less than 4% of the country’s GDP. Currently, NSSF is more than 10.6% of GDP.” He said.
He continued to say that in the last ten years, the growth rate of member registrations had oscillated between 17% per annum, compliance had increased from 40% to 60% , annual contributions indicated an upward trajectory and assets grew to 17.3 trillion in June 2022.
On the return to member savings, Byarugaba told the committee that the Fund was paying double digit interest rate above inflation over the last ten years. “Previously, NSSF wasn’t paying above inflation; the average interest pay out was 6.27% while inflation was at 6.3% . Over the last ten years, we have been paying double digit interest rates with inflation at 3.65%. Meaning that we are preserving member funds and giving real return to members. The highest interest rate paid to members in the history of the Fund is 15% that we paid in 2018.”
NSSF’s current management led by Patrick Ayota, the Ag . Managing Director had reported the same growth of the Fund when they appeared at the committee earlier in the week, contrary to allegations of unsatisfactory performance by Hon. Betty Amongi, Minister of Gender, Labour and Social development. NSSF is supervised by the Gender ministry and the Finance Ministry according to the new NSSF Act 2021. Whereas the Gender Ministry is in charge of operations at the Fund, the Finance Ministry oversees its investments.
Byarugaba also refuted claims of non-participation in the national development agenda by NSSF saying that the Fund provides government with 40% of its domestic borrowing. “For every 10 shillings the Ministry of finance borrows from the public to develop roads, electricity and the health sector, 4 shilllings is from the NSSF.If this doesn’t show participation in national development, then I don’t know what does!” Byarugaba said.
On the contentious shs6bn, Byarugaba said that Hon. Amongi had asked the Fund to provision for the money purportedly to support implementation of the new NSSF law and yet this was already provided for in the Fund’s overall operations budget for the financial year 2022/23. “The Minster’s letter of 16th June,2022 to the Fund clearly shows that she wanted to handle the shs6bn,” Byarugaba told the committee.
Regarding the alleged purchase of Nakigala land at shs400bn as part of the Fund’s real estate investments, Byarugaba clarified that the amount was provisioned as total budget estimates for all strategic land purchases for the FY 2022/23 to purchase two land assets and that the amount wasn’t entirely for Nakigala as alleged by the Minister.
On the shs40bn budget provision for the Grain Council, Byarugaba clarified that the Fund had declined to partner with the council due to disagreement in implementation on the back of unclear accountability measures. The minister had instead looked at this as “insubordination” from Byarugaba.
The Committee is chaired by Hon Mwine Mpaka who is the Member of Parliament for Mbarara City South. Other members of the committee include Workers MP Hon Charles Bakkabulindi, Mr. Karim Masaba (Industrial Division, Mbale City), Mr. Michael Kakembo (Entebbe Municipality), Ms. Fortunate Nantongo (Kyotera District Woman), Ms. Laura Kanushu (Persons with Disabilities), and Mr. Amos Kankunda (Rwampara County).
ABOUT NSSF
The National Social Security Fund Uganda is a multi-trillion Fund mandated by Government through the NSSF Act, as amended, to provide social security services to employees in the private sector.
The Fund is a secure, innovative, and dynamic social security provider that guarantees safety, security, and a competitive return on members’ savings of over 2% above the 10-year inflation average.
The Fund manages assets worth over UGX 17.8 trillion, invested in Fixed Income, Equities and Real Estate assets within the East Africa region. As the largest Fund in East Africa by value, we have the ambitious goal of growing our Assets Under Management to 20 trillion by 2025.
The Fund is regulated by the Uganda Retirement Benefits Regulatory Authority while the Minister of Gender, Labour & Social Development, and the Minister of Finance, Planning & Economic Development are responsible for policy oversight.
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