A recently released report from the National Social Security Fund (NSSF) indicates its asset management grew by 19.2% compared to the previous year. By the end of June 2024, the fund’s assets stood at 22.13 Trillion as compared to 18.56% in the previous year.
While addressing the media at the NSSF Annual Media Roundtable, NSSF Managing Director Patrick Ayota cited the significant growth of the fund’s assets, a thing he termed as a great move and good news to the members. Ayota highlighted that the fund’s member contributions increased as well.
“Our assets under management as of the end of June 2024 stood at Shs22.13 trillion, an increase of 19.2% compared to the previous year. We still hold our top position as the largest Fund by value in East Africa. The Fund’s member contributions increased by 12.2% from Shs1.72 trillion in the Financial Year 2022/23 to Shs1.93 trillion in the Financial Year 2023/24 and the cost of administration dropped from 1.02 to 1.00% of total assets. During the year, we recorded a milestone in asset growth, achieving our target of growing the Fund to Shs20 trillion by 2025 more than a year in advance.
The Fund, according to Ayota, registered huge growth not just in its revenue but had a better year across other key performance indicators, including growth in assets under management, contributions collected; benefits paid, and cost management.
The Fund recorded increased earnings by 15% from Shs2.2 trillion to Shs2.53 trillion for the Financial Year ended June 30, 2024. Ayota attributed the growth to an increase in interest income earnings, dividend income as well as real estate income.
“Income from all three asset classes we invest in increased this last Financial Year compared to the previous one. Interest income increased from Shs2 trillion to Shs2.34 trillion, dividend income from our listed and unlisted equities increased from Shs145.1 billion to 175 billion and income from our Real Estate investments also increased from Shs11.9 billion to 13.3 billion,” Ayota said.
He added that the Fund’s performance mirrors an improvement in the overall investment environment in Uganda and across East Africa. “Our analysis shows that although it was not without challenges, across East Africa, it was a better year compared to the Financial Year 2022/2023. The Ugandan economy recovered and recorded a 6% growth in GDP, inflation remained under control, regional stock markets recovered and the interest rates slightly increased,” he said.
Unlike the previous year, however, the amount of money paid in benefits reduced from Shs 1.199 trillion in the Financial Year 2022/23 to Shs 1.120 trillion in the Financial Year 2023/24.Ayota explained that the reduction was driven by a drop in the number of people who claimed benefits from 48,115 in the Financial Year 2022/23 to 44,250 in the Financial Year 2023/24. For instance, the mid-term benefit payments dropped from Shs272.2 billion to Shs 176.6 billion. “People who qualify to withdraw their savings are opting not to because they trust the Fund to not only ensure safety but also growth in value of their money. This is a responsibility we do not take for granted,” Ayota added.
He also acknowledged the Fund’s great move on Vision 2035 which includes growing the Fund to Shs50 trillion, extending social security coverage to 50% of Uganda’s working population, and ensuring service levels satisfaction of 95%, all by 2035.
While responding to Kampala Sqoop Emuk Benjamen’s question on why some members opt out of the fund and whether any follow ups are made to really determine the reason behind them opting out, Barbra Teddy Arimi, NSSF Head of Marketing and Corporate Affairs said, the biggest cause of dormancy is loss of jobs, a reason most members opt out.”
However, according to Ms. Arimi, all is not lost because statistics indicate that most of the members, who probably have in the past lost their jobs, are now complying and taking advantage of voluntarily saving.
