By Morrison Rwakakamba

The motivation behind putting workers’ money on open market

Going by both anecdotal and available experiential evidence, the most plausible motive behind the bill to fully liberalize social security in Uganda could be the low hanging fruit that the National Social Security Fund (NSSF) is - period! From international investment banking agencies to profiteering private and bureaucratic outfits – the target is most likely, liquid cash stashed at the NSSF. NSSF is Uganda’s largest liquidity holder with a current  asset base of UG shillings 3.85 trillion and the largest creditor of Government, holding treasury bills and bonds worth approximately 2 trillion shillings representing 40% of total government securities. NSSF currently has 9000 registered employers with 370,000 active members out of 35 million Ugandans. NSSF collects 50 billion UG shillings per month and an average collection of 556 billion UG shillings per annum for the last 3 years. The current annual payout to members is Uganda shillings 11.5 billion. Net earnings for 2012-2013 were Uganda shillings 376 billion. A 2013 Actuarial Valuation by M/s Callund Consulting of UK confirmed that NSSF is fully funded, with sufficient resources to discharge its liabilities to all its members, with zero expense to the tax payer.

The good financial health of NSSF has been massively dented by corruption and impropriety related scandals over the years. Procedural irregularities related to sale of bonds a few weeks before maturity, purchase of land at Nsimbe and Temangalo without following set procedures and the Uganda Clays Limited loan buyout that went bad – led to huge and injurious financial losses to workers/savers under the NSSF scheme. At the center of this preceding mess is the problem of poor fund governance. The integrity of this scheme can only be guaranteed with a strong governance mechanism with firm regulation and enforcement regime. The standard requirement and procedures for NSSF Board membership should be upgraded and stretched to cover the entire social security and wider social protection schemes in Uganda. Why isn’t the Country focusing on strengthening innovations at NSSF and tightening its governance to tame past scandals and secure savers money?  Why is the Liberalization of Retirement Benefits Sector Bill now before the Finance Committee of the 9th Parliament seeking to repeal the National Social Security Fund Act?