NSSF declares 9.65% interest rate for savers at 10th Annual Members Meeting

 

Uganda’s retirement savings organization, the National Social Security Fund (NSSF) has declared an interest rate of 9.65% for its members for the year ended 30th June 2022.

This year’s interest rate is slightly lower than what NSSF declared for the previous financial year in FY 2020/2021 which stood at 12.15%.  

The new interest rate was declared today on Tuesday, 27^th September 2022 by Hon Henry Musasizi, the Minister of State for Finance (General Duties) during NSSF’s 10^th Annual members Meeting that was held in Kampala.

Richard Byarugaba the Fund’s Managing Director explained the reasons for this year’s low interest rate.

“The effects of the global geo-politics affected regional markets, our economy and the Fund. Our growth was slower on contributions, compliance rates dropped, real estate products became more expensive, and our equity portfolio was affected, however, we remained resilient,” he said.

Mr. Byarugaba however insisted that the Fund remains sustainable.

 “Informality is growing, and the new law is allowing us to deal with it and achieve more growth. The Fund balance sheet size grew by 11% from UGX 15.56 trillion to UGX 17.25 trillion. This growth is consistent with the combined growth in investments driven by contributions and income generated net of benefits paid out,” Mr. Byarugaba assured the public.

During the annual event, Mr Byarugaba also announced that product innovation, partnering with SACCOs, insurance, savings groups, and driving the high-innovator agenda are part of the NSSF priorities going forward.

“We have continued improving our SESG agenda by innovating. So far, we have been able to create over 13,000 jobs and 7,000 entrepreneurs, and we have also improved our business advisory,” he announced.

The Fund’s Chief Executive Officer also said that NSSF has actively participated in various activities that have positively impacted on multitudes of Ugandans.

“We have been involved in financial literacy for Uganda. We have been able to touch at least 3 million people during that financial year.”

“The good news is that our fund is still sustainable. Our fund is still liquid because our member fund has increased to UGX 16.96 trillion, and our total assets are at UGX 17.25 trillion. This means today, if all our members wanted their money to be paid out, the fund would be able to pay them by liquidating our assets,” he said.

“We have kept our costs improving yearly as a percentage of our assets under management” he added.

The two Ministers in attendance; Mr Musasizi and Ms Betty Amongi, the Minister of Gender, Labour and Social Development, whose ministries are supervisory bodies to the Fund, commended NSSF’s leadership and management for weathering the storms to declare the interest rate.

“Despite the fact that probably members didn’t expect the interest declared considering the circumstances under which we are, the local and global economic turbulence, I think we should applaud NSSF,” said Hon Amongi.

The Minister also heaped praises on the Fund and also expressed her firm belief that NSSF is competitive on a sub continental level.  

“I want to state that so far, we have got a formidable team, a team of Ugandans that work tirelessly to make the fund one of the best in the region,” she added.

Mr Byarugaba explained that The Fund invests member savings in 3 asset classes namely; Fixed income, Equities and Real Estate.

“It is upon these investments that revenue is generated which runs the Fund and everything else is given to members as interest,” he said.

Richard Byarugaba also revealed that this financial year’s contributions only grew by 9%, while voluntary contributions grew by 5,000 new members on the employee side the fund managed to attract 1,000 new members on the employer side.