The National Social Security Fund (NSSF) has declared interest rate of 9.65% for its members for the year ended 30th June 2022. The new rate is down from the 12.15% interest rate that was declared for FY 2020/2021.
The Minister of State for Finance (General Duties) Henry Musasizi, declared the new interest rate during the NSSF 10TH Annual Members Meeting in Kampala on Tuesday, 27 September 2022.
NSSF Managing Director Richard Byarugaba explained the reasons for the low interest rate.
“The effects of the global geo-politics affected regional markets, our economy and the Fund. Our growth was slower on contributions, compliance rates dropped, real estate products became more expensive and our equity portfolio was affected, however, we remained resilient,” he said.
However, he insisted that the Fund remains sustainable.
“The good news is that our fund is still sustainable. Our fund is still liquid because our member fund has increased to UGX 16.96 trillion, and our total assets are at UGX 17.25 trillion. This means today, if all our members wanted their money to be paid out, the fund would be able to pay them by liquidating our assets,” he said.
“We have kept our costs improving yearly as a percentage of our assets under management” he added.
Both Mr Musasizi and Ms Betty Amongi, the minister of Gender, Labour and Social Development, whose ministries oversee the Fund, hailed the NSSF management for weathering the storms to declare the interest rate.
“Despite the fact that probably members didn’t expect the interest declared considering the circumstances under which we are, the local and global economic turbulence, I think we should applaud NSSF,” Ms Amongi said.
“I want to state that so far, we have got a formidable team, a team of Ugandans that work tirelessly to make the fund one of the best in the region,” she added.
Mr Byarugaba explained that the Fund invests member savings in 3 asset classes namely; Fixed income, Equities and Real Estate.
“It is upon these investments that revenue is generated which runs the Fund and everything else is given to members as interest,” he said.
Mr Byarugaba also said contributions only grew by 9%, voluntary contributions grew by 5000 new members on the employee side and 1000 on the employer side.
“Informality is growing and the new law is allowing us to deal with it and achieve more growth. The Fund balance sheet size grew by 11% from UGX 15.56 Tr to 17.25 Tr. This growth is consistent with the combined growth in investments driven by contributions and income generated net of benefits paid out,” he said.
Mr Byarugaba also announced that product innovation, partnering with SACCOs, insurance, savings groups, and driving the high-innovator agenda are part of the NSSF priorities going forward.
“We have continued improving our SESG agenda by innovating. So far, we have been able to create over 13,000 jobs and 7,000 entrepreneurs, and we have also improved our business advisory,” he said.
“We have been involved in financial literacy for Uganda. We have been able to touch at least 3 million people during that financial year,” he added.