The National Social Security Fund [NSSF] has set a target to grow its asset base from the current shillings 9 trillion to about shillings 20 trillion, Mr. Patrick Richard Byarugaba, the managing director has said.
Addressing a third regional meeting for employers drawn from the district across Northern Uganda at Margarita Palace Hotel – Lira on Monday, Byarugaba said this target will be achieved if the fund, which currently reaps a profit of 14 shillings on every shillings invested grows by shillings 1.4 trillion annually.
Boasting of an extraordinary returns from NSSF investments, Mr Byarugaba said the fund broke the ceiling last year when it recorded a collection of shillings 1 trillion for the first time.
In fiscal year 2016-2017, he says the fund only collected shillings 917 billion.
According to Byarugaba, this high returns on investments are attributed to the drastic reduction in inflation rates form 6.4% to 2.2%, while interest rates also came down to 17.7% from 35%.
“This means that more people were encouraged to borrow money and invest as a result of the low interest rates,” Byarugaba explains.
He adds that part of their success is attributed to the boom in the agriculture sector and deliberate move by the government to improve infrastructure in the country that led to growth in the economy by 5.8%.
NSSF is currently investing in equity, real estates and fixed income, not only in Uganda but the entire East African regional market; in Rwanda, Tanzania and Kenya to be specific, Fund’s chief added.
“It is not good to put your head in one basket, we have invested in these countries so that when Tanzania’s economy is destabilizing, we could still make money in Kenya or Rwanda,” adds Mr. Byarugaba.
Errant employers warned
The National Social Security Fund, created by an act of parliament demands that an employer with five employees upwards should save with the scheme by way of contributing 10% of the employee’s salary while the employee remits 5% of his monthly salary in the savings
But, Richard Byarugaba says most employers have not bought into this idea with many dodging to enroll and save for their employees.
He says this is a breach of the law and NSSF would crack a whip. “Our approach is to reach out to you and talk to you, but we can also jail you,” Mr. Byaruhanga warned.
He says NSSF is however flexible to draw payments plans with employees who have defaulted instead of punishing them so long as they are willing to cooperate.
But he adds that in 2017-2018, NSSF collected shillings 4 billion in court cases that it instituted against incompliant employers.
Meanwhile, Byaruhanga has also reiterated that NSSF will now pay 15% compounded interest on the savings to its members.
Currently, out of a projected population of about 40 million Ugandans, only 20m are employed but it is only a paltry 2 % of employees that have been enrolled with NSSF
Savers react
There was however some concerns from the public majorly on the guidelines for accessing the money.
“55 years is a lot, most of the people are sick, is there a way it could be lowered,” a participant asked.
In his response, Mr. Byarugaba said there is a bill before parliament which once passed will come with many armaments.
For instance, he says they intend to shorten the period that one takes to process his savings from the current seven days to just 24hrs.
He says the new legislation would also introduce maternity, housing and unemployment benefits.
The NSSF says she is always concerned about giving back to the community by way of cooperate social responsibility (CSR), citing donations it made in the past to the maternity ward at Lira Regional Referral Hospital and constructing walkways for pupils with vision impairment at Ikwera school for the blind in the present day Kwania district.
Future plans revealed
The National Social Security Fund currently has 17 branches; four sub branches and 30 outreach centers.
According to its MD, on top of some of its investments like Workers House in Kampala and City House in Jinja, they have acquired land in towns like Mbale and Gulu which they intend to develop to generate income.
Who is Mr. Byarugaba?
Mr. Byarugaba is one of Uganda’s renowned bankers. Now at 59, his banking career spans over 27 years.
He started his banking career in 1983 with Standard Chartered Bank and rose through the ranks to the position of Executive Director for Finance in 1992.
In 1994, he was transferred to London as Regional Manager for Finance in charge of Africa region.
While there [In London], he made his mark through the implementation of a multi-million accounting software for the bank’s Africa operations.
He returned to Uganda and was in 2003, appointed Nile Bank Managing Director until December 2006 when the bank was acquired by Barclays Bank.
He served as Barclays Bank Chief Operations Officer until November 2008 when he assumed a new role as Managing Director of Global Trust Bank.
Mr. Byarugaba is a qualified Accountant with the Association of Chartered Certified Accountants. He also holds a management diploma from the Henley Management College of UK.
A former President of the Uganda Institute of Bankers, he has also served on several board positions at Hospice Africa, Standard Chartered Bank, Nile Bank, Palliative Care Association of Uganda and the Uganda Institute of Banking and Financial Services.
