Our Managing Director's Statement
Amidst the highly disrupted financial year driven by the evolving global pandemic, the Fund continued to achieve exceptional performance with the members’ well-being still firmly at heart. We pledge to continue to be resilient and we remain committed to deliver our strategy - Vision 2025
MANAGING DIRECTOR
Richard Byarugaba
It gives me profound pleasure to present the Fund’s Annual Integrated Report for the Financial Year 2020/2021 (FY2020/2021).
As expected, the year was particularly volatile. The first half of the financial year was unstable and slow, which saw the Fund struggling to achieve its targets in an economy that seemed to draw further away from the recovery. Despite of all these unprecedented events, we were actively focused on how to provide better value to our members to make their lives better.
Operating environment
In FY 2020/2021, Uganda’s economy grew at 3% compared to the projected rate of 5% and prior year of 3.3%. Inflation averaged 2% compared to 4.1% for the prior year. The other factors that characterised the economy during FY 2020/2021 include uncertainty from pre and post January 2021 national elections, a long-wet season that favoured agricultural production and supply resulting in relatively low food prices, a strong shilling, and stable interest rate regime. The impact of Covid-19 slowed down the economy, crippling several sectors for the greatest part of the financial year.
Performance
Our performance was a testament of our efforts to continue growing the Fund in line with our 10-year Strategy (Vision 2025). The aggregate impact of Covid-19 is still evolving, however even with a slower economic growth rate of 3%, the Fund withstood this storm and performed beyond expectations.
During the FY 2020/2021, the Fund registered exceptional performance in the following key financial areas:
Customer Centricity is part of our DNA
Digitisation of our customer journey
As part of the Fund’s drive to provide an efficient and convenient service to our members, the Fund increased the digitisation of customer engagement across our e-Channels. Resultantly, our e-Channels engagement improved from 88% FY2019/2020 to 94% FY2020/2021 right from onboarding to the exit of the member.
We saw a marked decline in compliance levels which stood at 51% against a target of 60%, majorly attributed to the impact of Covid-19 on the key sectors of hospitality and education. Despite this, the Fund continued to demonstrate its resilience through the use of e-Channels for both registrations and collections.
Customer perspective
We attained an 86% rating in customer satisfaction compared to the 85% target. Our commitment to making lives better for all our members is based on two principal aspects; their financial wellness and their capacity to access our offerings in a helpful, speedy, and secure way. To drive this, we have evolved our financial literacy programme into a digital Financial Literacy Academy with an all-inclusive ages programme. This has incorporated all-encompassing financial literacy material, as well as mentors and empowerment courses for our members and the public.
Our unique and prudent planning saw the Fund pay UGX 642 Bn worth of benefits, with a total of 1,633 benefits claims received and processed online. Over 51% of all benefits paid were completed within 7 days and we remain on course to achieve all payments of benefits within 24 hours by 2025.
Investment portfolio
FY2020/2021 was another strong year with a total investment portfolio of UGX 15.31Tn, comprising 78% in Fixed Income, 15% in Equities and 7% in Real Estate as compared to the Strategic Assets Allocation (SAA) of 70%, 22.5% and 7.5% respectively.
The interest to members’ Fund was 12.15% compared to the budget of 10.55%, resulting into UGX 1,516 Bn credited to member accounts.
We also continued to finalise the real estate projects undertaken over the previous financial years with Pension Towers and Lubowa Estate Phase I on course to be completed within the FY2021/2022, all factors remaining constant.
The Fund employees
The Fund introduced a Staff Wellness Programme, through the Company Health Advisors which has considerably boosted staff productivity, reduced health risk, and motivated the team to deliver on expectations of defined key performance indicators. This programme also provided an anchor for all round support to our employees and their families during the ongoing impact of the pandemic. Consequently, employee engagement rose to an all-time high of 94% during the financial year.
The Ministry of Finance, Planning and Economic Development, Matia Kasaija announcing a 10.75% interest rate to members during the AMM
The new normal
The new age of working brought innovative opportunities, needs and challenges. Looking forward, we have planned for even faster growth in digital technology and innovation to boost the Fund’s value proposition.
The Fund also launched the Hi-Innovator, an initiative aimed at identifying and supporting Uganda’s small and growing businesses that have the potential for profound future impact. The Fund, along with MasterCard as the principal partner, is working to grow these businesses through entrepreneurship education, funding, and technical support.
As the world recovers and adopts to the ‘new -normal’, we have realised that human intervention, above technology, is instrumental to drive future sustainable success. Therefore, as we determine future changing needs and shape our lifestyles based on current circumstances, we need to pursue innovative ways to support budding businesses to thrive, survive and create new wealth to grow our economy for long-term sustainability.
Outlook for the year ahead
In FY 2021/2022, we shall continue to operate responsibly, advance the Fund’s 10-year Strategy, and strengthen the Fund’s commitment to making the lives of our members (and society at large) better.
We shall maintain our focus on the key priorities of the Fund by implementing key business transformation initiatives and attaining the best value from our investments. We will also look for diversification opportunities of the investment portfolio within Uganda and the East African Region specifically in both Fixed Income and Equities asset classes.
Challenges
As the Covid-19 pandemic evolves, it comes with the continued strain on several business sectors which will continue to negatively impact the contributions during the coming financial year.
The NSSF Amendment Bill is currently with the President for affirmation. This remains a significant management challenge as it creates an uncertain strategic direction for the Fund.
In conclusion
Despite the disruptions in the FY 2020/2021, we delicately balanced the risk-return equation to ensure that we add value to our members’ savings, and our pledge is that we will continue to do so. No matter what the uncertain environment presents, we shall strive to be the social security provider of choice.
I would like to thank the Board for being that constant beacon, especially in these turbulent times. Above all, I convey my immense appreciation to the management team and staff of the Fund whose resilience and innovativeness has always shone through. To our dear members, you are always at the centre of all that we do. We shall walk this journey with you to making your lives better.
Richard Byarugaba
MANAGING DIRECTOR