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Chairman's Statement

I would like to take this opportunity to applaud the Board and Management of NSSF for the commendable performance; registered in the just concluded financial year. I also want to congratulate and thank the 11th Board, whose three (3) year tenure ends on 31 August 2021, for leading the Fund in a commendable manner for the benefit of its members, stakeholders, and the country at large

CHAIRMAN, BOARD OF DIRECTORS

Patrick Byabakama Kaberenge

It is my pleasure to present to you this edition of the National Social Security Fund Annual Integrated Report for the Financial Year ended 30 June 2021.

Operating external environment

During the financial year, the world economies were grossly disrupted by the Covid-19 pandemic, and the East African Region in which we operate was no exception.

Uganda’s Gross Domestic Product (GDP) for the year averaged 3% compared to the previous year’s growth at 3.3% and 5% projected growth rate amidst the Covid-19 pandemic. This is expected to have a detrimental effect on the domestic economic growth recovery in the medium and long term. However, at NSSF, we continued to show our resilience in most areas and that is commendable. On the Inflation front, headline inflation relatively dropped to 2% compared to 4.1% in the previous year and thus members funds are not unduly eroded.

Achievements during my six years as the Board chairman

During my six-year tenure, the Fund assets under management have virtually tripled from UGX 5.6 Tn to UGX 15.6 Tn, annual interest income growing from UGX 659 Bn to UGX 1,605 Bn, annual contributions collection grown from UGX 785 Bn to UGX 1,367 Bn, while benefits paid out have grown from UGX 239 Bn to UGX 642 Bn in the same period.

All this success has been delivered by a lean team of staff of about 600 persons working with relentless commitment and enthusiasm, while keeping costs under control. The Fund’s cost of administration has reduced to 1.06% compared to 2% within regional funds of a similar size.

Strategic review and delivering on our purpose

The Board remains committed to fulfilling its mandate of providing an enabling governance framework and supporting the Fund’s management to deliver on our 10-Year Strategic Plan.

By June 2025, we set out to achieve the following:

  • A customer satisfaction rating of 95%
  • Growth of the Fund Assets to UGX 20 Tn
  • Pay benefits within a turnaround time (TAT) of 1 day
  • A staff satisfaction rating of 95%

We are on track to deliver on our promise and have so far attained:

  • A customer satisfaction rating of 86%
  • Fund size at UGX 15.6 Tn
  • Benefits TAT of 8 days
  • A staff satisfaction rating of 94%

National development and the real estate projects

In the recent past, the Board set priorities throughout the year mainly aiming at developing key infrastructure that can lead to national development. The Board has overseen development of real estate projects – while addressing the challenge of affordability and increase in the costs of basic infrastructure.

With only 7% of the investment assets in the real estate portfolio, we still have the capacity to intervene and help the country to reduce the housing deficit. We plan to establish NSSF as the leader in the housing sector and to have a societal impact in this space.

Progress with real estate projects:

  • Pension Towers is up to 67% completion - expected to be completed in the coming financial year (FY 2021/2022)
  • Lubowa Housing estate: comprising of 306 units for occupation - 85% complete and will be completed in FY 2021/2022
  • Temangalo Housing Project – we have sourced a contractor and ground-breaking progress is planned in the FY 2021/2022 for relatively low-cost houses
  • Off-taker Project Kyanja in Kampala - completed up to 37%
  • Bwebajja Government Campus – we are finalising the transaction modalities before implementation expected during FY 2021/2022

NSSF Amendment Bill

During the financial year, Parliament passed the NSSF Amendment Bill which was sent to the President for assent. The key need for midterm access has been agreed in principle, and in the current times of the pandemic, this will be a relief to our members and a stimulus to the economy. This will also extinguish a future liability from the Fund which is a win-win situation to both the members and the Fund. We are sure that with the new law in place, the Fund will be propelled to greater heights; and it will enable the Fund to address a number of lifecycle needs of our members.

Challenges during the reporting period

The delayed amendment of the law certainly did not make life easy for the Board as it kept us in suspense regarding the right strategic direction to take. For example, requests for midterm access related to Covid-19 could not be effectively handled because it was not covered in the current NSSF Act.

Covid-19 pandemic

  • Deferment of contributions by our employers had a stalling effect on collections for the year. However, I am glad to report that we exceeded our annual target, nevertheless.
  • Some of our customers were unable to access our services because they lacked enabling infrastructure to access our e-channels.
  • Remote working by staff has been something new which created certain tension and anxiety that at times affected productivity. This challenge has now largely been overcome.

Limited investment opportunities on the stock exchanges to provide meaningful diversification, due to few new listings also remains a challenge. This has meant that most funds are absorbed by the fixed income space, or government bonds in particular. We remain entangled in land wrangles with both encroachers and purported feudal landowners which threaten the real estate investment portfolio of the Fund. However, as a Board, we remain committed to protect the Fund assets and members’ funds.

  • Looking ahead

    Macroeconomics and geopolitical shifts will greatly affect the Fund’s performance. With a projected 4.4% GDP growth rate for the year 2021/2022, coupled with the continuing dynamics of the Covid-19 pandemic, the Fund will have to double its efforts to meet its June 2022 targets. Come 1st September 2021, a new Board should be in place, ready to steer the Fund to achieving its strategic objectives. The positions of Managing Director and Deputy Managing Director will also have to be filled in about a years’ time from now. Focus areas for the next 12 months include:

    • Continuation of real estate investments in Temangalo for both low and medium housing units.
    • Completion of Pension Towers building, and Lubowa Housing project phase 1 in the next financial year. The plan is to use the Lubowa unit sales as a revolving Fund to grow this portfolio as we roll out phase 2.
    • Fast tracking the progress of Bwebajja Government campus under the public private partnership with a return of 22%, further benefiting members.
    • Upgrading IT infrastructure by completing the Pension Administration System (PAS) Project whose Go Live data has been postponed to October 2021 due to Covid-19 restrictions.
    • Maintaining business resilience during ongoing challenges with the Covid-19 pandemic, supporting remote working and observing all SOPS as advised by the health officials.
    • Increasing membership or national coverage with new opportunities presented by the amendment of the NSSF law.

  • Conclusion and appreciation

    The Fund has delivered and will continue to deliver on its promise.

    The Fund’s performance is testament to our committed staff, acting with integrity, in the best interests of making lives better for our members and this has brought about stability. Staff are motivated and the Board acknowledges their contributions, in making NSSF what it is today.

    I thank the Government of Uganda for the pivotal role it has played in supporting the Funds’ initiatives. Our pledge is to continue contributing to national economic development and keeping our private pension sector safe, respectable, and robust.

    Patrick Byabakama Kaberenge
    CHAIRMAN, BOARD OF DIRECTORS