National Social Security Fund (NSSF) has registered a Shs400b growth in income, representing a percentage increase of 25 per cent.
The growth signals sustained resilience amid Covid-19 related disruptions and a slowdown in economic growth.
During the period ended June 30, the Fund registered Shs1.84 trillion in investment income compared to Shs1.47 trillion in the period ended June 30, 2020.
This was driven by growth in interest income, largely attributed to the increase in return on treasury bonds, dividend income and real estate income.
For instance, during the period, interest income grew from Shs1.4 trillion to Shs1.6 trillion while dividend income grew from shs62.2b to 7.49b. Real estate income grew to Shs53.5b up from Shs11.1b.
During the period, Mr Richard Byarugaba, the NSSF managing director, said the Fund had benefited from a consolidated pay-out in dividends that had been held back by a number of companies at the height of Covid-19 disruptions.
NSSF commands one of the largest investment portfolios in Uganda with 78 per cent invested in fixed income while 15 per cent is invested in equities and 7 per cent in real estate.
In April last year, Bank of Uganda and Uganda Securities Exchange directed commercial banks and listed companies, respectively, to delay payment of dividends to retain money for discretionary capital and the real economy.
While presenting the Fund’s financial results for the period ended June 30 in Kampala yesterday, Mr Byarugaba said the Fund had despite a number of challenges registered growth in member contributions which grew from Shs1.27 trillion to Shs1.37 trillion, representing an increase of 8 per cent.
However, he said, the Fund had also registered substantial growth in benefits pay out which during the period increased by 29 per cent, growing to Shs642.3b compared to Shs496.4b for the period ended June 2020.
Mr Byarugaba also noted that the Fund had paid out at least Shs2b to members battling Covid-19 through the invalidity benefit window.
However, he said, the overriding growth in benefits pay out compared to collections was a demonstration that the Fund had now matured with its growth generated from investment income rather than member contributions. During the period, the Fund defied Covid-19 related disruptions to grow in its assets portfolio from Shs13.3 trillion for the period ended June 30, 2020 to Shs15 trillion, representing 17 per cent growth.
Mr Byarugaba also noted that whereas there had been a lot of disruptions across the globe and Uganda in particular, the Fund had remained resilient with focus now shifted on giving members more value on their contributions as well as achieving commitments under the 2015-25 strategic plan.
Under the 2015-25 strategic plan, the Fund is expected to have grown its assets portfolio to Shs20 trillion by 2025.
Other key expectations, Mr Byarugaba said, include putting in place measures to reduce age benefits processing to a single day, delivering 95 per cent customer and workers’ satisfaction.
Adapting to new demands
According to Mr Byarugaba, the Fund has built solutions to change the horizon that now grants members mid-term access, expansion of coverage to include the informal sector and expansion of the voluntary space.
The Fund, he says, is also working to actualise housing arrangements for members in the next three years. However, the Fund will approach this with caution, given the cost implication involved vis-à-vis the return on investment.