The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | The National Social Security Fund (NSSF) is on track to achieve all its 2015-2025 strategic objectives by 2025, and even earlier in some instances, their new Managing Director Patrick Ayota has stated. He has also promised that the Fund will yet again pay a competitive interest rate for the Financial Year 2022/23 next week.
“Ten years ago, we committed to pay NSSF members a real return – at least 2 percentage points above the 10-year rate of inflation. We have consistently delivered on the promise and will continue to do so,” Ayota said in Kampala today.
The Minister of Finance, Planning and Economic Development will declare a new rate at the 11th Annual Members Meeting scheduled for September 26, 2023.
Presenting at his first Media roundtable since taking over the fund’s top job, Ayota said NSSF has withered the storm of inquests in the past year, and produced incredible results.
Not only did member contributions increase from Sh1.49 trillion in Financial Year 2021/22 to Sh1.72 trillion in Financial Year 2022/23, but customer satisfaction with the funds performance remained at a high 86%.
Cost Management – cost of administration reduced from 1.18% of total assets to 1.02%. “We created more value for members using less money compared to last Financial Year,” Ayota told the press at Serena Kampala Hotel.
He revealed that the Fund’s Assets Under Management (AUM) increased from Sh17.26 trillion in Financial Year 2021/22 to Sh8.56 trillion in Financial Year 2023/24.
This growth was driven by the fact that total realised income earned increased by 15% from Sh 1.9 trillion in the Financial Year 2022/22 to Sh 2.2 trillion in the Financial Year 2022/23, and by the cost-to-income ratio that improved from 11.7% in the Financial Year 2021/22 to 9.4% in the Financial Year 2022/23
“With the current asset base, we project that the strategic goal of growing the Assets Under Management of sh20 Trillion by 2025 will be achieved by June 30, 2024, one year ahead of schedule,” Ayota told the media.
Impact of NSSF probes
The past year saw the former MD Richard Byarugaba’s contract not renewed, NSSF faced several probes from parliament and the office of the IGG, that questioned several managment decisions the fund had taken, and recommended changes. Byarugaba was replaced by Ayota soon after.
“The performance on customer and staff satisfaction (down 86% compared to 93% in the previous Financial Year) reflects the challenges the Fund went through in the 2nd half of the year. However, we are confident that given the continuity and stability going forward, these strategic objectives are within reach,” Ayota said.
Ayota also stated that the investment environment in Uganda and the region had been generally challenging in the Financial Year 2022/23. He mentioned that, despite inflation being under control, the decrease in the value of the stock markets in Kenya and Uganda, the strengthening of the Uganda Shilling against the regional currencies, and the decrease in long-term bond interest rates had all contributed to a depressed market.
“While our performance remains strong and the Fund is a profitable institution, and in some years, we will experience some volatility, our strategic focus is on the long-term sustainability of the Fund,” he said.
As of June 30, 2023, the following was NSSF’S investment mix: Equities at 12.5%, Real Estate at 9.01% and Fixed Income at 78.48%.
“Our new ‘Vision 2035’” is the bedrock of our long-term strategic focus– where we want to grow the Fund to UGX 50 trillion, cover at least 50% of the working population, and achieve 95% and both customer satisfaction and staff engagement.”
FULL VIDEO OF EVENT
