How NSSF Assets Grew to Shs20T

by Business Times writer
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The National Social Security Fund (NSSF), Uganda’s national savings scheme, has hit Shs. 20 trillion in Assets Under Management, one and a half years ahead of schedule, according to the Fund’s 10-year Strategic Plan.

In 2015, the Fund launched the 2015-2025 Strategic Plan, with a key strategic objective to grow the Fund’s Assets Under Management to Ushs20 trillion by 2025. The other strategic objectives were improvement in business processes to pay benefits to qualifying members in 1 day and achieving 95% staff and customer satisfaction.

This early achievement from the 2025 target signifies that the NSSF’s managed assets surged by a minimum of Shs1.5 trillion from Shs18.56 trillion in June 2023 to Shs20 trillion by December 2023, driven by higher investment income from member contributions.

“The unwavering commitment to deliver our value proposition of safety, convenience, and empowerment to our members, has propelled the Fund to achieve this milestone,” said NSSF Managing Director, Patrick Ayota.

“When we set this audacious goal in 2015, to many people, it seemed beyond reach. In addition, we did not know that the journey would be filled with disruptions: a global pandemic that kept us locked for almost 2 years, an unprecedented mid-term benefit payout, and disruptive and intrusive investigations. Despite all this, we didn’t just endure, we thrived,” he added.

The key drivers that enabled the Fund to achieve the milestone ahead of schedule are consistent growth in both contributions from members and income from the Fund’s investments.

Information from the Fund indicates that members’ contributions increased from only Ushs 688 billion in 2015 to Ushs1.27 trillion in 2020 and hit Ushs1.72 trillion by 2023.

Despite the volatile economic environment over the last 10 years, income has also consistently increased. In 2015, the Fund’s income stood at shs 583.2 billion, but rose to Ushs 1.47 trillion by 2020. Last Financial Year, the Fund recorded Ushs 2.2 trillion in realised income.

Similarly, the Assets Under Management have increased over the years. The assets under management increased from sh. 5.5 trillion in 2014/15 financial year to shs6.5 trillion in the financial year 2025/16, to shs. 7.9 trillion in the financial year 2016/17, shs9.9 trillion in the financial year 2017/18, shs. 11. 3 trillion in the financial year 2018/19, shs 13.2 trillion in 2019/20, shs15.5 trillion in 2020/21, shs. 17.2 trillion in 2021/22, shs. 18.5 trillion shillings in 2022/23, and shs20 trillion in the financial year 2023/24.

The Fund’s milestone shows resilience despite cases of mismanagement of members’ savings of up to shs 5 billion by the former leadership.

Last year, the Inspectorate of Government (IG) ordered former NSSF Managing Director, Richard Byarugaba and former Director of Finance, Stevens Mwanje to jointly refund the 5 billion shillings loss they caused to the Fund.

The two were accused by the Minister of Gender, Labour and Social Development, Betty Amongi of mismanagement, abuse of office and corruption.

Amongi raised over 25 concerns that her Ministry which supervises NSSF, wanted investigated, following a report from Parliament and a petition by representatives of workers, NSSF savers and labor unions.

The Inspectorate of Government took up the probe as asked by Gender Minister, and on Friday, June 30, 2023, the Inspector General of Government (IGG), Betty Kamya released the report.

The IGG’s investigation revealed that a financial loss of up to shs. 5 billion was incurred by the Fund under the stewardship of the former Managing Director, Byarugaba.

The report pinned Byarugaba and Mwanje for illegally engineering the resignation of two NSSF Board members at a cost of 687 million shillings.

The report further revealed that Byarugaba and Mwanje caused NSSF, a financial loss of shs. 4.4 billion when they authorized irregular payments to staff who exited under voluntary early retirement.

How NSSF Invests Members’ Savings

NSSF manages its portfolio through a diversified approach, investing in various asset classes, including: real estate, corporate bonds, equities among others.

The Fund allocates a portion of its funds to government securities, such as treasury bonds and treasury bills. These fixed-income investments provide stable returns and contribute to the overall portfolio.

Additionally, NSSF has made significant investments in real estate. This includes acquiring properties, developing commercial and residential spaces, and participating in real estate projects. Real estate investments offer long-term growth potential and rental income.

Further, the Fund invests in equity shares of publicly traded companies. By holding shares in various sectors, NSSF benefits from capital appreciation and dividends. Equities can be volatile but offer higher growth potential.

NSSF also invests in corporate bonds, which are debt securities issued by private companies. These bonds provide fixed interest payments and contribute to diversification.

What Savers Want to See

NSSF savers have on several occasions asked the Fund to invest in their respective regions.

This is because much of NSSF’s investments are concentrated around the capital Kampala.

Some of the several NSSF real estate projects located in the central region include; the Lubowa housing project, Citadel Apartments Mbuya, Pension Towers, and Temangalo among others

Plan to Grow NSSF to 50 Trillion

NSSF recently unveiled “Vision 2035”, targeting to increase the Fund’s enrollment of the country’s total workforce from 10% to 50%, and grow the Fund to 50 trillion shillings.

“Our new “Vision 2035” is the bedrock of our long-term strategic focus– where we want to grow the Fund to 50 trillion shillings, cover at least 50% of the working population, and achieve 95% and both customer satisfaction and staff engagement,” Ayota said recently.

In pursuit of its “Vision 2035,” the NSSF plans to intentionally implement fresh initiatives aimed at fostering both the ability and the eagerness of Ugandans to save.

“Creating a capacity to save simply means that the Fund will roll out a sustainability strategy focusing on job creation, intervening in the agriculture value chain, and supporting the innovation ecosystem. On the other hand, creating a willingness to save means that we shall implement empowerment programmes for our members through financial literacy, increasing compliance, and innovating value-adding products.”

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