We will not be able to pay double digit interest - NSSF 

National Social Security Fund (NSSF) recovered from a 44 per cent revenue reduction in the 2018/19 finacial year to post a 17 per cent growth in income for the period ended June 30. 
The Fund, which had in the 2018/19 financial year reported a revenue loss of Shs402b, yesterday said it had recovered from the slump to post Shs1.47 trillion as of June 30. 

However, the Fund warned that for the period ended June 30, it will not be able to pay members a double digit interest rate due to negative effects brought about by Covid-19. 
NSSF has for at least more than five years paid members an interest rate of above 10 per cent. 
For instance, last year members benefited from an 11 per cent interest rate and 15 per cent for the 2017/18 financial year. 
The Fund had last paid a single-digital interest rate nine years ago in the 2010/11 financial year.  

Finance Minister Matia Kasaija is expected to declare this year’s interest rate on Monday during the Fund’s annual members’ meeting.
Addressing a virtual press conference on the performance of the Fund in Kampala yesterday, Mr Richard Byarugaba, the NSSF managing director, said that whereas the Fund had faced some challenges in the period to June 30, it  had registered growth both in value and member contributions.  

For instance, he said, assets under management, otherwise the real value and portfolio of the Fund, had during the period, increased by 17 per cent from Shs11.3 trillion to Shs13.38 trillion.  
The growth, Mr Byarugaba said, had been possible due to increased contributions and interest income. 
During the period, member contributions increased by 5 per cent from Shs1.22 trillion to Shs1.28 trillion while money paid out in benefits increased by 8 per cent from Shs486b in the 2018/19 financial year to Shs450b in the 2019/20 financial year. 
However, the increase in member contributions was slower than that of the 2018/19 financial year, in which the Fund had reported a 17 per cent growth from Shs1.049 trillion to Shs1.208 trillion, mainly due to growth in voluntary contributions. 

Mr Byarugaba also noted that the Fund had differed payment of Shs22b in a campaign that sought to offer amnesty to businesses that had been grossly affected by Covid-19. 
The Fund also reported a reduction in dividend income, which fell by 19 per cent from Shs77b to Shs62b due to cancellation of dividend payouts by commercial banks.
In April, the Central Bank directed supervised financial institutions to suspend dividend and bonus payments as it sought to create a buffer on which such institutions would retain sufficient capital to run their operations and the wider economy. 

Early this month, the Central Bank indicated that banks were holding at least Shs436.3b in unpaid dividend and bonuses for the period ended June. The money is yet to be paid out to shareholders. 
During the period to June, Mr Byarugaba said, NSSF had suffered due to low economic growth, decline in fixed income, deferred dividend payments and exchange rate depreciation across East Africa.