The Covid-19 pandemic has accelerated the need for our decision making to respond with agility, at the same time ensuring that we protect the sustainability of our business in the long term.
Utilising our capital inputs in the most efficient manner informs our business model in order to optimise our capital outputs and outcomes for our stakeholders. At times tough decisions need to be made which are in conflict with stakeholder needs and making strategic trade-offs is necessary to ensure stability for the future.
Apart from creating and preserving value, there are instances where value is diminished through our activities. When making decisions on how to manage our business, we consider the trade-offs between capitals: we aim to maximise positive outputs and outcomes and limit negative impacts.
The trade-offs that we have made during the reporting period and the rationale for our decisions are reflected below.
Trade-offs in our use of financial capital
Positive Impact
Short term negative impact
Risks
Materiality Themes
The trade-offs of remote work: Building a more resilient workplace for the post Covid-19 world
We have embraced remote working in a bid to adhere to social distancing and lockdown measures. This has resulted in 70% of our employees working from home.
Key actions
This has required significant investment in providing our staff with the necessary tools (laptops, mobile phones and remote connectivity) to enable them to work effectively. In addition, cyber security and IT stability is paramount to continuity of our operations as we continue to accelerate our digitalisation strategy through automation and use of digital platforms. The Fund has therefore had to invest heavily in information security to improve the strength of the security infrastructure.
Contributed to the following SDG’s
I.T spend grew by 22% to UGX 9.8Bn (2020: UGX 8Bn) due to remote working.
The table below shows the number and percentage increase in the use of the digital platforms during the reporting period
| Key digital achievements | Number | % Increase |
|---|---|---|
| App Installed base | 76,601 | 67.8% |
| YouTube Views | 1,361,507 | 620.7% |
| NSSFGo Web Visitors | 325,456 | 115% |
| Corporate Web Visitors | 501,558 | 25.5% |
| Twitter Engagement | 180,890 | 48% |
| Facebook Engagement | 702,626 | 46.9% |
| Financial Literacy Participants online | 67,272 | 95% |
| E-channel to walk-in ratio | 94:6 |
The trade-offs of contribution collection: Supporting our employers to remain afloat during Covid-19
Since the outbreak of Covid-19, the Fund has offered deferrals to distressed companies to enable them to manage their cashflows, return to profitability and pay contributions later without penalties. As a result of this important gesture, the target contribution growth rates in both 2020 and 2021 were negatively affected.
Key actions
The Fund has had to endure the cashflows and liquidity challenges to realise its investment return targets and remain in a position to meet our minimum commitment to our members which is to preserve the value of their savings by paying 200 basis points above the 10-year average inflation.
Contributed to the following SDG’s
Trade-offs on our use of financial capital
Positive Impact
Short term negative impact
Risks
Materiality Themes
Trade-offs in our use of human capital
Long term positive impact
Short term negative impact
Risks
Materiality Themes
The trade-offs of remote work: Building a more skilled work force for the changing business needs
We have embraced remote working in a bid to adhere to social distancing and lockdown measures. This has resulted in 70% of our employees working from home. This has significantly increased productivity levels on an individual basis after some staff have come to realise that their individual performance is now keenly monitored in a bid to track engagement and productivity levels on a more regular basis than before while all staff were fully in office.
This has required the Fund to re-assess and re-align its staff establishment while taking advantage of increased productivity to address any gaps. This has increased anxiety levels with staff regarding remote working to have a negative influence on future job stability and security. Given that ensuring job security is a Board priority and remote working is becoming a new normal, the Fund has therefore made a decision to invest in:
Contributed to the following SDG’s
Although spend may have declined, the following statistics stood out from the online training initiative embraced by the Fund to boost business skills. Business skills focuses on building soft and technical skills required by staff to deliver on their roles.
| Online training statistics | ||
|---|---|---|
| Item | Description | Achievement |
| Adoption Rate | 562 learners out of 608 licenses were utilised during the period | 92% |
| Content Access | 536 learners out of the total 608 accessed at least one learning asset on the platform | 88% |
| Completion Score | Average completion score for courses attempted by SLDP users | 91% |
| Course completed | Number of online courses completed by staff during the reporting period | 2,606 |
| Badges Earned | Number of learning badges awarded to the business skills team during the period | 2,368 |
| Learning Hours | Hours spent on all business skills learning items within the period | 1,793 |
The reskilling expenditure declined by 23% to UGX 2Bn (2020: UGX 2.6Bn) because all training was carried out online which is more cost effective.
Some of the opportunities presented with online training are that learning can take place within the flow of work. As opposed to 8 hours a day of work in a physical or classroom setting, you can use less than 3 hours because of the flexibility presented by the online training method. This increases the levels of productivity. The top courses completed during the reporting period were:
Trade-offs in our use of manufactured capital
Positive Impact
Short term negative impact
The trade-offs of Benefits TAT: Pay members’ benefits within 7 days in FY 2020/2021 and in 1 day by 2025.
The biggest challenge for the Fund is the existence of only a few investment opportunities on the stock exchanges to provide meaningful diversification, because of few new listings. This has meant that most funds are absorbed by the fixed income space. During the reporting period and for the first time the government of Uganda issued a 20- year bond at a very competitive return.
Key Actions
The Fund embraced this opportunity to invest significantly in this instrument given it is well aligned to our strategy. This required significant amounts of liquidity and cash flow which unfortunately coincided with our peak period for benefits payment, which come shortly after declaration of annual interest to members.
The Fund had therefore to suffer on the benefits TAT given the liquidity challenges posed by the cash flow needs to meet both the investment and the benefits payment.
Contributed to the following SDG’s
The trade-offs of affordable houses: Building more affordable houses for our stakeholders.
As part of our investment portfolio, the Fund engages in real estate project development and in addressing the challenge of affordability and increase in the costs of basic infrastructure including land, roads, telecom, water, electricity among others. In the bid to address the challenge of affordability and balancing consumer vs. returns to members, the Fund will continue to review its strategic assets allocation to seek longer term fixed income instruments where returns are much higher than the returns in the real estate investment portfolio.
Such costs increase the fixed costs of real estate development and at the end of the day affect the price of the final house to the consumer. Because of the societal concerns for affordable housing, this compromises our need for the real estate project to provide a good gross return to the member (200 basis points above the 10-year average inflation).
Key Actions
Given this challenge, the Fund has had to invest in carrying out feasibility studies for Temangalo and Nsimbe projects which will provide more affordable housing units targeted at the middle-and lower-income segments of our society.
