The Finance and Economics Development Minister, Matia Kasaijja, has officially declared a 10% interest rate for member’s savings in the National Social Security Fund (NSSF) for the fiscal year ending in June 2023. The 10% interest rate translates into a substantial total of Shillings 1.591 trillion to be credited to the accounts of NSSF members.
Kasaijja’s announcement aligns with the fund’s commitment to providing an interest rate that exceeds the average inflation rate recorded over the past decade by 2 percentage points. The ten-year average inflation rate stands at 4.2 percent. It’s noteworthy that the 10% interest rate marks a 0.35% increase compared to the 9.65% rate announced during the same period in the previous year.
This upward adjustment is attributed to the fund’s improved income, which has risen from 1.9 trillion shillings to 2.2 trillion Shillings during the same period. Kasaijja commended the fund’s management and leadership for their commendable performance, despite facing managerial challenges over the past 8 months. He expressed satisfaction with the growth of the fund’s assets, which now exceed 18.65 trillion Shillings.
“I am especially glad the Fund’s assets against registered growth to 18.65 trillion shillings. Many naysayers didn’t imagine the possibility of growing this Fund to 20 trillion shillings that we will achieve this strategic objective, a year ahead of schedule and it is laudable,” he said.
The remarkable 15% increase in the fund’s income, from 1.9 trillion to 2.2 trillion, signifies prudent and productive investments made by the fund, according to the minister. Betty Amongi, the Minister for Gender, whose ministry now shares oversight of the fund with the Ministry of Finance, expressed satisfaction with the increased collections despite the challenges faced during the transition.
She praised the fund’s management for their resilience in steering the organization through adversity, resulting in a positive outlook. Patrick Ayota, the NSSF Managing Director, highlighted the growth in the fund’s dividend income from equity and real estate projects. He noted that the dividend income from equity had grown from 84 billion Shillings to 139 billion Shillings, while real estate projects had slightly increased from 13.4 billion Shillings to 14 billion Shillings.
Ayota acknowledged past challenges and scandals faced by the NSSF, including allegations of mismanagement. These issues had undergone parliamentary and Inspectorate of Government investigations. Despite these challenges, Ayota emphasized the fund’s strength and resilience. He pointed out that the fund had disbursed 1.2 trillion Shillings in benefits to its members, demonstrating its commitment to fulfilling its core mandate.
He also stated that the government’s decision to offer a 10% interest rate to NSSF members reflected its dedication to providing attractive returns on social savings, even in the face of previous challenges and scandals. Ayota further highlighted that the fund had collected 3.3 trillion Shillings the previous year, with expenditures of 190 billion Shillings and earnings of 2.2 trillion Shillings.
He noted that for every shilling invested, the fund generated 17.4 Shillings in revenue. The NSSF is committed to its strategic plan to reach 50 trillion Shillings in assets by 2035, achieve a 50% coverage rate of the country’s working population, and ensure 95% customer and employee satisfaction. Currently, the fund’s assets under management exceed 18.6 trillion Shillings, making it the largest social security fund in East Africa by value.
Customer and staff satisfaction currently stands at 85% and 86%, respectively, while the benefits payment timeline has been reduced to just 11 days. The fund boasts 2.2 million registered members, 882,000 registered employers, 456,000 active employers, 17 branches across the country, and 579 staff members.
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