By Our Reporter
The National Social Security Fund (NSSF) will credit its members’ accounts with 12.3% interest rate for the last Financial Year, worth over Ushs 606 billion up from Ushs 516 billion in the previous year.
The Minister of Finance, Planning and Economic Development, Hon Matia Kasaija, told journalists today at a press conference held at the NSSF Workers House in Kampala that although the interest rate slightly dropped from 13% paid out the previous year, it was still a good rate given the difficult economic environment the Fund operated in during that financial year.
“The rate this year is above the 10-year average rate of inflation, now at the 8.85%, against which the Fund rates itself. This means NSSF is indeed growing the value of its members’ savings. In addition, a further breakdown shows that the 12.3% interest rate I have declared translates into Ushs 606 billion that will be credited to members, a 17% increase, compared to Ushs 516 billion that was paid out the previous year. In effect, NSSF members will earn Ushs 90 billion more compared to the previous year,” he said.
NSSF Managing Director Richard Byarugaba said that the Fund’s performance was mainly affected by stock markets decline across East Africa, which affected the Fund’s equity portfolio. Volatility of the Uganda shilling against foreign currencies and pre and post-election uncertainty also had a knock on effect on the business environment, according to the Internation Monetary Fund.
“Nonetheless, the Fund still registered a good performance. We have grown from Ushs 5.6 trillion in FY2014/2015 to Ushs 6.5 trillion, an increment of 18%. The growth in Fund size was driven by the continued growth in both member contributions and investment returns. Realized revenue went up by 21% from Ushs 583 billion to Ushs 708 billion, mainly due to improved bond yields and dividend income from equity investments. Treasury yields improved across all maturities, rising above the 17% mark compared to last year’s 16.7%,” he said.
He also revealed NSSF registered a profit after tax of Ushs 491 billion, mainly driven by good yields from the Fixed Income portfolio and also registered an increase in member contributions by 14%, from Ushs 688 billion to Ushs 785 billion, mainly as a result of improved compliance and new member registrations.
Benefits paid out to qualifying members also increased by 28%, from Ushs 187 billion to Ushs 239 billion, mainly as a result of an increase in number of claimants and improved turnaround time, now at 8 days.
NSSF Board Chairman Patrick Byabakama Kaberenge said the Fund will continue to seek viable investment opportunities and undertake strategic investments across its entire portfolio, even as the economy undergoes a difficult recovery.
“We will also continue to strengthen the Fund’s management systems and internal controls, in line with our emphasis on good corporate governance. Our members’ savings are without a doubt secure and the board is fully committed to ensuring that funds are invested in projects that give a reasonable return,” he said.