The ministry of Finance Matia Kasaijja, has declared a 10 per cent interest rate for National Social Security Fund (NSSF) savers for the fiscal year ending in June 2023.
The 10 per cent interest rate translates into a substantial total of Shs 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 per cent. It's noteworthy that the 10 per cent interest rate marks a 0.35 per cent 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 Shs 1.9 trillion to Shs 2.2 trillion during the same period.
“I am especially glad the fund’s assets against registered growth to Shs 18.65 trillion. Many naysayers didn’t imagine the possibility of growing this fund to Shs 20 trillion that we will achieve this strategic objective, a year ahead of schedule and it is laudable,” he said.
The remarkable 15 per cent increase in the fund's income, from Shs 1.9 trillion to Shs 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 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, NSSF managing director, highlighted the growth in the fund's dividend income from equity and real estate projects.
Ayota acknowledged past challenges and scandals faced by 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 Shs 1.2 trillion 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 per cent 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 Shs 3.3 trillion the previous year, with expenditures of Shs 190 billion and earnings of Shs 2.2 trillion.
He noted that for every shilling invested, the fund generated Shs 17.4 in revenue and that NSSF is committed to its strategic plan to reach Shs 50 trillion in assets by 2035, achieve a 50 per cent coverage rate of the country's working population, and ensure 95 per cent customer and employee satisfaction. Currently, the fund's assets under management exceed Shs 18.6 trillion, making it the largest social security fund in East Africa by value.
Customer and staff satisfaction currently stands at 85 per cent and 86 per cent, 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.