NSSF Pays 15 Percent Record Interest to Members

2000 Views Kampala, Uganda

In short
State Minister for General Duties Gabriel Ajedra said NSSF performed extremely better in all financial and investments indicators, despite difficult economic conditions, posting a record total income of 1.6 trillion Shillings in the 2017/18 financial year.

The National Social Security Fund (NSSF) has announced a record 15 percent interest that will be paid to its members for the 2017/18 financial year.

State Minister for General Duties Gabriel Ajedra announced the interest during the NSSF annual members meeting held at the Pearl of Africa Hotel, Kampala today.

Ajedra said NSSF performed extremely better in all financial and investments indicators, despite difficult economic conditions, posting a record total income of 1.6 trillion Shillings in the 2017/18 financial year.

According to NSSF latest financial data, the fund received 912 billion shillings from interest payments, dividends and rental fees at the end of the financial year 2016/2017, while total member contributions rose from 917 billion Shillings to 1.05 trillion Shillings.

The data indicates that the fund's total assets increased from 7.92 trillion Shillings in 2016/17 to 9.98 trillion Shillings, while total benefits paid out to members grew from 278 billion Shillings to 360 billion Shillings.

The 15 percent interest, which is worth 1.1 trillion Shillings, is far higher than the 11.2 percent paid out during the financial year 2016/17 and significantly higher than the 10 year inflation average rate which stands at 7.3 percent. The members will, therefore, earn 7.7 percent above the inflation, a cushion against the future erosion of their savings.
 
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NSSF Board Chairman Patrick Byabakama Kaberenge explained that the 15 percent interest that they are paying members is much higher than interest paid by commercial banks or even Bank of Uganda.
 
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Gabriel Ajedra said that the payment to members is higher than 681 billion Shillings paid to members last year. The interest is paid on principle savings that members had at the end of July.
 
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 According to Ajedra, the Fund's total membership has now expanded to 2.2 million, from 1.5 million in 2017 and 500,000 three years ago. Over 33,200 employers are paying employees mandatory saving to NSSF.  The fund further paid over Uganda shilling 360 billion to qualifying members in benefits. This meant that over one billion Shillings was paid daily.
 
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NSSF Managing Director Richard Byarugaba said that member contributions grew mainly because of new players that entered the manufacturing and education sectors plus engineering contractors who won contracts to execute large infrastructure projects.

 

About the author

Blanshe Musinguzi
Musinguzi Blanshe is a politics-cum-business journalist. He joined Uganda Radio Network in February 2017. Previously, he worked at Daily Monitor and Red Pepper Publications Limited. He is keenly interested in data journalism.