Matia Kasaija The National Social Security Fund (NSSF) declared an interest rate of 10.75% for the financial year 2019/2020, pacifying members who were worried that figure would be a single-digit following earlier indicators by the Fund’s managing director that its performance had slowed.
Minister of Finance, Planning and Economic Development, Matia Kasaija announced the rate, which is lower than last year’s 11% interest, during the Fund’s 8th Annual Members Meeting at Kampala Serena Hotel.
This past week the NSSF managing director Richard Byarugaba announced that they might not be able to pay double-digit interests after recording the lowest contributions in the past 10 years.
“Economic slowdown also had a ripple effect on the Fund’s business, and contributions were affected. Contributions grew at 5.2%, the lowest level in the last 10 years,” he said.
“Member contributions increased by only 5% from Shs1.22 trillion to Shs1.28 trillion. The marginal growth is attributed to the amnesty we offered to businesses that were affected by the Covid-19 pandemic.”
“To put into context, the Fund deferred a total of about Shs22 billion.”
According to a statement from the Fund, the rate declared translates into a total of Shs1.14trillion that will be credited to its more than two million members’ accounts.
This is higher than the Shs933 billion that was paid to members in the previous financial year.
The cut in the interest rate is majorly due to the economic slowdown occasioned by the COVID-19 pandemic and deferment of dividend payments by Bank of Uganda, among other factors, that affected the Fund’s performance.
“Despite the COVID-19 pandemic that has affected the economy and many businesses, NSSF has remained resilient, meeting its annual business objectives especially in the areas of Assets Under Management that grew by 17% from Shs11.3 trillion to Shs13.3trillion and the total revenue that increased by 17%,” said Minister Kasaija.
“I would therefore like to congratulate the NSSF team upon delivering a remarkable performance in the 2019/2020 in spite of the challenging macro environment.”Byarugaba reechoed the Fund’s resilience in the tough operating environment.“Many businesses both locally and globally are either closing down or seeking solutions for survival rather than expansion. I am happy that the Fund has been able to absorb the shocks as evidenced from our performance,” he said.The NSSF Chairman, Board of Directors, Patrick Kaberenge reassured members that the Fund was still committed to preserving value for their savings.“Despite a tough investment environment characterized by a strong shilling and depressed equity […]