The National Social Security Fund-NSSF will give its savers a 12.15 percent interest on their savings for the year 2020/2021, an increase from 10.75 percent that was paid out last financial year.
Finance Minister Matia Kasaija attributed the increase to the good performance of the Fund throughout the year, despite a hard business environment.
The 12.5 percent interest will translate into a total of sh1.52 trillion that the NSSF will deposit on the saver’s accounts.
Kasaija said that this interest rate is commendable because it is far above the inflation rate, and one of the most competitive rates in the market.
But NSSF Managing Director, Richard Byarugaba said there has been a slowdown in the contributions by members due to the harsh economic conditions. “Growth in contributions has been slowing down over the years. This means businesses are not doing very well. But the good news is that we were able to grow faster than the economy.”
He however said the investment returns have recovered and attributed this to many factors, including the improved performance of the equity markets in the region where it has invested and the fall in administrative costs.
.The Fund’s total assets under management (the size of the fund) grew 17.1 percent from 13.28 trillion shillings to 15.56 trillion. This is above the targeted 15.01 trillion Shillings.
About 15 percent of the Fund’s investments are in public equities, or companies listed on the stock markets in Uganda, Kenya, and Tanzania, while 78 percent are in fixed-income assets like corporate bonds and government treasury bonds in the regions. Real estate projects account for 7 percent. Byarugaba says there was growth across all stock markets in the region, and this led to a good recovery of the revenues.