NSSF rides propitious winds to register income, interest surgeFlanked by NSSF Managing Director Richard Byarugaba, Finance Minister Matia Kasaija declares a 12.15pc return on members savings for at the Serena Conference Centre
A tailwind in the fixed income portfolio has propelled Uganda’s provident fund NSSF to a robust performance, culminating in the announcement of 12.15pc in interest on members saving for fiscal 2020-21. The return betters the 10.75pc paid out the previous year.
The rate was declared by Finance Minister Matia Kasaija during the Fund’s ninth annual members meeting earlier today. It translates into a payout of UGX1.52 trillion that will be credited to the members’ accounts, starting today. The Fund paid out UGX UGX1.14 trillion last financial year.
Assets grew 17pc from UGX13.3 trillion to UGX15.5 trillion while comprehensive income expanded 25pc from UGX 1.47 trillion to UGX 1.84 trillion.
“The growth in income interest can be attributed to the increased return on Treasury Bonds in the Fixed Income portfolio, dividend income and property sales,” managing director Richard Byarugaba, said while presenting performance highlights during the meeting.
New board chair Dr. Peter Kimbowa, said focus for this financial year will be on legislative reform that expand the Fund’s catchment area and the range of benefits to members. It will be compulsory for all employers regardless of enterprise size, to register workers for NSSF while alternative investment windows have been opened for voluntary savings. Purpose-specific fixed savings plans, will be available to even members from the informal sector while the benefits envelope will now include a health plan.
“As a new board, our focus for this financial year will be majorly to conclude legislative reforms, ensure prudent investments and to ensure that our staff are prepared for a different operating environment that will be ushered in by the legislative reforms,” Kimbowa said.
Matia Kasaija said the rate of return demonstrated the Fund’s resilience to survive a turbulent marketplace.
“The performance as presented by the NSSF MD and Chairman is commendable given that the COVID-19 pandemic has had massive economic and social effects across the globe. Uganda was no exception, with the Economy growing at 3.3pc in the financial year 2020 to 2021. To register any growth is therefore very commendable.” Kasaija said in comments on the results.
The 12.15pc interest rate declared is above the 10 years average rate of inflation which currently stands at 5.43pc.
Member contributions also grew 8pc rising from UGX 1.27 trillion to UGX 1.37 trillion. The new growth is partly attributable to the return of some employers from an amnesty the Fund extended to businesses that were stressed by the COVID-19 pandemic the previous year.
Cost of administration shrunk from 1.20pc to 1.03pc over the latest accounting period while benefits paid out to maturing members surged by 30pc, from UGX 496.4 billion in fiscal 2019/2020 to UGX 642.3 billion in 2020/21. The increase is the result of a growth in the number of claimants, and the acceleration of invalidity benefits to savers that contracted COVID-19.