NSSF boss tells Ugandans to stop lavish spending
April 26, 2018— Richard Byarugaba, the National Social Security Fund (NSSF) managing director, has asked Ugandans to stop their lavish spending on such things as baby showers and birthday parties, but invest their money in viable assets for future income security.
He said statistics for the region show that Ugandans continue have one of the lowest savings cultures compared to the other countries in East Africa.“We save less than 10 pc of our income because we consume 90 pc of our income. Even the 10 pc is because it is forced on us,” he said. It is mandatory for most employees in the formal sector to save 15pc of their gross monthly income with NSSF. The employer contributes 10pc.
While addressing the Western and Northern region employers meeting held in Arua, northern Uganda in mid-week, Byarugaba said failure to save is a matter of choices, regardless of how much you earn, you can set your priorities and stop spending on things that don’t make returns.
“To save, you need to list your priorities and stop spending on useless things. Why spend money on baby showers, bridal showers, birthday parties, graduation parties? Save that lump sum for business or invest in assets,” he said.
Byarugaba said NSSF members should look at the money they save with NSSF as a long term investment. He said, “When you decide to save you should save for the short term, save for the medium term and also save for the long term. The biggest reason why most businesses do not have capital is that we are not saving. We want to rely on banks for loans which will require interest.”
Byarugaba said the Fund has grown and at the moment is valued at 10 pc of Uganda’s GDP. “All the money we collect is not touched but invested. Our assets under investments grew from UGX6.5 trillion toUX 7.9 trillion (about $2.1 billion),” he said.
During the meetings many members had the opportunity to ask the fund managers questions. Many of them wanted to get their savings early so as re invest some of their total contributions.
Many people have the impression that they are not going to live to receive their benefits. However, the data from the NSSF shows that 97 per cent of the fund’s members live to receive their benefits with only 3 per cent members’ benefits being received by survivors.
The regional annual employers meetings are a requirement of the Fund to keep its members informed about the investments and what activities NSSF plans for them.
Byarugaba said the Fund got feedback during the annual members meeting in Kampala that many the members upcountry were unable to attend so it was decided that in addition to the Annual Members Meeting in Kampala, the Fund would institute regional meetings as well.
The meetings are held in three cities outside Kampala, one meeting Kampala, another meeting in the Western region, Northern region and Eastern region.
This is the second year the fund is running such meetings. The first meeting was in Mbale which had record attendance of the NSSF members who are based in the Eastern region. The second meeting was held in Kabarole on Tuesday last week and it attracted more than 500 members from Western region and the Greater Masaka region.