NSSF must create more value for members, says Minister Amongi 

Gender, Labour and Social Development Minister Betty Amongi, has said National Social Security Fund (NSSF) must find ways through which it can create value for members beyond paying interest and benefits. 

In a speech read for her during the opening of the International Social Security Association (ISSA) liaison office in Kampala last week, Ms Amongi, whose ministry partly share the responsibility of supervising NSSF, challenged the Fund to provide “more value in health, education, agriculture and financial empowerment,” noting that it was time to “innovate products and services that address the short-term and long-term social security needs of members if it is indeed to provide real social security”.  

“I, therefore, challenge the Fund to provide more value,” she said, adding that government had also found evidence that points to the fact that the traditional way of social security administration was no longer sustainable. 

Over the years, members, including research conducted by NSSF, have argued that the Fund must empower savers by delivering more value throughout their journey as members from the point of entry to exit. 

However, not much has been done in that direction, apart from urging members to share into ownership of housing projects, many of which are priced way above majority of members’ reach. 

Ms Amongi also challenged NSSF to innovate ways through which it could recruit more members, highlighting that out of the 17 million Ugandans who work and qualify to be members of NSSF, only 10 percent are compliant. 

NSSF, under the 2022 amendments to the NSSF Act, was mandated to recruit members through voluntary and mandatory schemes. 

The Fund has thus been mopping up different parts of the country in a bid to recruit new members. 

The law also provides that all companies, irrespective of how many people they employ, must remit social security contributions to NSSF. 

NSSF’s active membership has stagnated to slightly above 1.2 million members, of which as of March 2022, about 902,844 were under the mandatory saving scheme while 31,146 were under the voluntary scheme. 

Uganda lacks a robust social security sector, which exposes much of the country’s population to extreme poverty before and after retirement. 

Therefore, Ms Amongi said, it was inevitable for NSSF to embrace new channels such as digitisation to extend its reach through which the Fund would serve the entire country effectively and efficiently. 

Mr Patrick Ayota, the newly appointed NSSF managing director, told Monitor on the sidelines of the opening of ISSA office that outflows from the Fund in terms of benefits to members has increased from 15 percent in 2015 to 70 percent, noting that the money collected as contributions are flowing to qualifying members, which has reduced liquidity of the Fund. 

“This is the reason why we have come up with a strategy of increasing NSSF coverage to 50 percent by 2035 because we need to expand coverage, while at the same time we come out with innovations by introducing new products for sustainability of the fund,” he said.  

The ISSA liaison office is expected to promote dialogue and cooperation between ISSA members within East Africa by highlighting regional priority policies and topics to advance social security.  

Need for a shift  

Ms Amongi also says that in the last five years, “we have seen evidence pointing to the fact that the traditional way of social security administration cannot lead to adequate coverage, noting that the benefits paid out of Fund members had reached a threshold that outstrips collected contributions.     

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