The National Social Security Fund has a mixed picture in its performance over the nine months ending March 202, compared to the same period ending March 2020. This is largely due to the effects of the COVID-19 pandemic, as well as the changes in the foreign exchange rates.
By March 2021, the members’ fund had grown to 14.62 trillion Shillings compared to 12.65 trillion Shillings recorded at the end of March 2020, despite a slight decline in members’ contributions over the two periods. A statement by NSSF attributes this to the ‘continued growth in investment assets and contribution collections.’
The previous period ended just before the lockdown in March, while the current period started in July, when the country had eased the lockdown in a number of sectors. The months April to June, where businesses and the economy as a whole suffered most, are not part of this report, but the effects of the shutdown still linger on the economy, according to Richard Byarugaba, the Chief Executive Officer, NSSF.
According to the figures, by March 2021, contributions received amounted to 965 billion Shillings compared to the 975 billion Shillings recorded at the end of the previous period. This was as a result of failure by companies to remit employee savings due to cash distress, while some companies had laid off workers due to the effects of the lockdown.
The Fund also realized an increase in income from daily operations of 125 billion Shillings mainly due to a better performance of its rental business, but the total incomes were affected by the loss of dividends especially when the Bank of Uganda and the Central Bank of Kenya stopped commercial banks from giving dividends to shareholders.
NSSF has shares across the stock markets in the region. The Ugandan banks in which NSSF has ownership include Stanbic, DFCU and Bank of Baroda, while it also invested in DTB, CFC Stanbic, KCB, Equity and NIC Bank. The income from dividends, therefore, declined by 24.5 billion Shillings to 27.5 billion Shillings.
Other losses amounting to 207 billion Shillings came from the foreign currency exchange on investments as most foreign currencies lost value against the Uganda Shilling, bringing the total comprehensive income to 30.1 billion Shillings compared to -35.2 billion Shillings. The Fund was however able to pay benefits to members, amounting to 557.9 billion Shillings up from 430.5 billion Shillings paid in the nine months ended March 2020.
NSSF Management hopes that improvement in the Ugandan and regional economies this year will help improve the performance, to maintain the value of the savings of the members. The Fund has also maintained progress on its construction projects, with the 32-floor Pension Towers now estimated at 50 per cent completion and expected to be completed February next year.
Construction works for all the types of units at Lubowa Housing Estate are now at 82 per cent and works are expected to end in July this year, while the Kyanja estate is due for completion next January. Byarugaba says that the project design for the Temangalo low-cost housing project commenced in November 2020 and the construction due to start this July is expected to end November 2023.