Savers with the National Social Security Fund (NSSF) have earned 11.5% interest rate for the Financial Year 2023/24, following a declaration by the Minister of Finance, Planning and Economic Development Hon Matia Kasaija.
A record Ugx 2 trillion will be paid to members’ accounts, calculated and credited on the balance outstanding on the members’ accounts as at 1st July 2023, in accordance with section 36 (1) of the NSSF Act.
“The interest rate I have declared is above the 10-year average rate of inflation currently at 4.2%, and the 2023/24 inflation which stood at 3.9%. The Fund is preserving and growing the value of members’ savings having consistently paid more than 2% above the 10-year average rate of inflation for more than 10 years and counting,” Minister Kasaija added.
According to figures from the Fund, more than 2.3 million members are registered and have a balance on their savings accounts.
The interest rate declared by the Minister is an increase from 10% the Fund paid the previous Financial Year. At Ugx 2 trillion, the amount paid in interest has also increased from Ugx 1.58 trillion paid out the previous Financial Year.
The Minister of State for Labour, Employment, and Industrial Relations Hon. Davinia Esther Anyakun said that the Ministry has concluded consultations with workers to fine-tune regulations to enable the Fund roll out voluntary products.
“The consultative process to structure Regulations for the new Voluntary Products has been concluded. This was necessary, drawing from lessons of the other legislative processes. I undertake to endorse and publish the Regulations as soon as I receive the final legal text from the Attorney General’s Office,” she said.
She also commended the Fund for fully embracing the Environmental, Social & Governance (ESG) principles, having incorporated environmental stewardship, social responsibility, and economic resilience in its operations.
Patrick Ayota, the NSSF Managing Director said that the Fund returned positive growth across all key performance indicators, including growth in assets under management, contributions collected, benefits paid, and cost management.
“During the year, we recorded a milestone in asset growth, achieving our target of growing the Fund to UGX 20 trillion by 2025 more than a year in advance. Our assets under management as of the end of June 2024 stood at UGX 22.13 trillion, an increase of 19.2% compared to the previous year. We still hold our top position as the largest Fund by value in East Africa,” Ayota said.
The Fund’s member contributions increased by 12.2% from Ugx 1.72 trillion in the Financial Year 2022/23 to Ugx 1.93 trillion in the Financial Year 2023/24 and the cost of administration dropped from 1.02 to 1.00% of total assets,” he added.
Unlike the previous year, however, the amount of money paid in benefits reduced from UGX 1.199 trillion in the Financial Year 2022/23 to UGX 1.120 trillion in the Financial Year 2023/24.
Ayota explained that the reduction was driven by a drop in the number of people who claimed benefits from 48,115 in the Financial Year 2022/23 to 44,250 in the Financial Year 2023/24. For instance, the mid-term benefit payments dropped from Ugx 272.2 billion to Ugx 176.6 billion.
“People who qualify to withdraw their savings are opting not to because they trust the Fund to not only ensure safety but also growth in value of their money. This is a responsibility we do not take for granted,” Ayota added.
He added that the Fund has embarked on Vision 2035 which includes growing the Fund to UGX 50 trillion, extending social security coverage to 50% of Uganda’s working population, and ensuring service levels satisfaction of 95%, all by 2035.
