Why NSSF interest to members fell to 12.3%

Finance minister Matia Kasaija (left) declares an interest earning of 12.3 per cent for savers with the National Social Security Fund (NSSF) at a press briefing recently. Looking on is NSSF MD Richard Byarugaba. FILE PHOTO

What you need to know:

  • Recently, National Social Security Fund declared a 12.3 per cent interest on members’ savings, down from 13 per cent in 2014. Mark Keith Muhumuza explains why the Fund’s interest dropped.
  • According to NSSF, treasury yields improved across all maturities, rising above the 17 per cent mark compared to last year at 16.7 per cent. This is almost a flat performance on the short-term government paper.
  • Lending to governments has been lucrative for the last two financial years. This is because the rates had been on the high side as the commercial banks – and NSSF – preferred to lend to the government. The government securities were in part responsible for the rise in income at the Fund

If there was a better way to express the effects of a weak economy in 2015/16, the performance of the National Social Security Fund (NSSF) would make for a good analogy.

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