NSSF Slashes Interest Rate to 12.3 Percent

2319 Views Kampala, Uganda

In short
Finance Minister Matia Kasaija said although the interest rates slightly dropped from the 13 percent given in 2014/15, it nonetheless is a good rate considering that the economy has been turbulent. He said he expects better results next year.

The National Social Security Fund (NSSF) has slashed the interest on members contributions from 13 to 12.3 percent. The rate is however above the 10-year inflation rate of 8.85 percent.  

The Minister of Finance, Planning and Economic Development, Matia Kasaija, under whose docket the Fund falls, declared the interest rates today at the NSSF headquarters Workers' House in Kampala.
 
Kasaija said although the interest rates slightly dropped from the 13 percent given in 2014/15, it nonetheless is a good rate considering that the economy has been turbulent. He said he expects better results next year.
 
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NSSF Managing Director Richard Byarugaba, said the Fund's performance was still good despite operating in a difficult environment.
 
Byarugaba said the Fund's performance was affected by stock markets decline across East Africa, the volatility of the Uganda Shilling against hard and regional currencies and uncertainties around the 2016 general election.
 
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According to Byarugaba, the value of equities held by NSSF in various companies actually reduced due to the decline of stock markets in East Africa.

NSSF has shares in companies like Umeme, Housing Finance, Equity Group, Vision Group and many others listed on stock markets in Uganda, Kenya and Tanzania.

Byarugaba said NSSF in the last financial year grew to 6.5 trillion Shilling from 5.6 trillion Shillings the previous year, equivalent to one trillion Shillings. He said this was largely driven by members contributions and investment returns.
 
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Benefits paid out to qualifying members increased by 28 percent from 187 billion Shillings to 239 billion Shillings, attributable to increase in the number of claimants and improved turnaround time, now at eight days.
 
The NSSF Board Chair, Patrick Byabakama Kaberenge, said they are strategizing to have a better performance in 2016/17 by undertaking strategic investments across the portfolios, while taking into account calculated risks, checks and balances and good corporate governance.
 
Kaberenge assured the NSSF members that their funds are secure, adding that they will ensure the funds are invested in projects with reasonable returns without risking the Fund's capital base.
 
NSSF presently has 1.5 million members but only 700,000 are active.
 
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About the author

David Rupiny
In his own words, David Rupiny says, "I am literally a self-trained journalist with over 12 years of experience. Add the formative, student days then I can trace my journalism roots to 1988 when as a fresher in Ordinary Level I used to report for The Giraffe News at St Aloysius College Nyapea in northern Uganda.


In addition to URN for which I have worked for five years now, I have had stints at Radio Paidha, Radio Pacis, Nile FM and KFM. I have also contributed stories for The Crusader, The New Vision and The Monitor. I have also been a contributor for international news organisations like the BBC and Institute for War and Peace Reporting. I am also a local stringer for Radio Netherlands Worldwide.


I am also a media entrepreneur. I founded The West Niler newspaper and now runs Rainbow Media Corporation (Rainbow Radio 88.2 FM in Nebbi). My areas of interest are conflict and peacebuilding, business, climate change, health and children and young people, among others."