By URN
The amount of money that Ugandans contribute to the National Social Security Fund (NSSF) has risen from 1.27 trillion shillings in 2020 to 1.72 trillion in 2023. This contribution comes from up to 2.2 million members.
Information obtained from NSSF indicates that this growth in savings has been the major contributing factor to the current increase in the assets under the fund’s management. As of 29th February, the assets under NSSF management had risen from 18.5 trillion shillings last year to 20 trillion shillings. Patrick Ayota, the NSSF managing director, says the fund has hit the 20 trillion shillings, one and a half years ahead of schedule, according to their 10-year strategic plan set in 2015.
“When we set this audacious goal in 2015, to many people, it seemed beyond reach,” Fund Managing Director Patrick Ayota says. “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. The unwavering commitment to deliver our value proposition of safety, convenience, and empowerment to our members has propelled the Fund to achieve this milestone.”
According to Ayota, alongside achieving the 20 trillion shillings target as the key strategic objective, 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.
He added that 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 shows that its income grew from 1.47 trillion shillings in 2020 to the record high 2.2 trillion, realized last financial year. The combination of the two is why the fund is now at 20 trillion shillings.
The managing director says that despite the volatile economic environment over the last 10 years, the fund’s income has also consistently increased. In 2015, the Fund’s income stood at 583.2 billion shillings, but rose to 1.47 trillion shillings by 2020, and last Financial Year, it was recorded at 2.2 trillion shillings.
NSSF statistics indicate that as of June 20 2023, the fund’s investment portfolio allocation stood at 78% in Fixed Income, 13% in Equities and 9% in Real Estate.
Ayota expressed confidence in the fund’s ability to achieve its strategic objectives as scheduled. Some benefit types such as Age and mid-term, are already being paid in less than 7 days, while the average payment time is currently 11 days. Customer and staff satisfaction stood at 86% as at the end of last Financial Year.
“We thank God, we thank our staff, various Boards of Directors over the years, our supervising ministries, and all who have made this possible,” Ayota said. “We are now on the brink of a new era – a new day where we aim to redefine what is possible once again. Our next goal is to grow Assets Under Management (AUM) to 50 trillion shillings by 2035,” Ayota said.
At a wider scope, information from the Uganda Retirements Benefits Regulatory Authority (URBRA) shows that the number of people saving for retirement has increased from 3,015,807 in 2022 to 3,142,311 in 2022.
The URBRA 2023 report shows that up to 79% of the funds are invested in government securities, and that sector contributes up to 60% of gross domestic savings, accounting for 11.5% of the gross domestic product. Additionally, the schemes paid up to UGX235 billion to the government in taxes in 2023, up from UGX227 billion in 2022.
