Ayota’s ambitious Shs50t NSSF plan

The management of the National Social Security Fund (NSSF) yesterday launched a 10-year plan to grow the Fund by Shs30 trillion and increase membership to cover half of the population. 
The Fund, established in 1985,  grew from Shs3.5 trillion in 2012 to Shs18.4 trillion currently.

It is projected to grow to Shs20 trillion by 2025, the same year the new strategy unveiled by the newly appointed managing director, Patrick Micheal Ayota, will kick off. 

“We have developed vision 2035... We want to expand social security to most Ugandans. Our purpose is to make lives better by making savings a way of life. We want to dial that number to 50 percent. We have to make sure we get into the informal sector, agriculture. We believe when we do that, we will get to Shs50 trillion by 2035,” Mr Ayota yesterday said yesterday during a press briefing in Kampala. 

The current strategic plan launched in 2015, expires in 2025.  
“I am glad to note that we are on course to meet, and in some instances surpass these targets by 2025,” he said.

Vision 2035, lays emphasis on expanding social security coverage by tapping into virgin areas like the informal sector, and agriculture, which employ the largest chunk of the population. 

The Fund also plans to ramp up partnerships with both the government and private sector to create jobs and support innovations.

“We have two prongs that we are following. To create a willingness to save and the capacity to save. We will do so through innovation and agility. Creating a willingness to save means we shall implement empowerment programmes, financial literacy, partnerships, and increasing compliance. Creating a capacity to save means that the Fund will roll out a sustainability strategy focusing on job creation...and supporting the innovation ecosystem,” Mr Ayota said.

He added: “We have a programme called the Hi-innovator which is looking at startups. We have done 267 startups so far, with 2,800 members. The target is to do 500 by 2025. In agriculture, we are getting involved on the demand side because markets are the biggest handicap to agriculture. Together with the government, we are doing an initiative to be able to provide markets and bring certainty and predictability. When we do that and farmers make more money, they will be able to save with the fund.”

The amended NSSF Act that came into force in 2022 opened up the Fund for self-employed individuals to save voluntarily. Mr Ayota, said sector-tailored products and benefits dubbed Smartlife will be rolled out for the informal sector. 

Along with the formal sector, this will drive membership from the current 10 percent of the population to 50 percent. 

In March, 1.5 million members of the 2.5 registered members at the Fund had a running balance. Of these, only 700,000 were active contributors. 

As a result, the Fund has embarked on a campaign for massive registration of new members and a window for defaulting ones to make good on remittances before penalties are effected. The revised law imposes a penalty of 10 percent of the accrued arrears for noncompliance, which compounds every month. 

Section 7(2) of the law provides that every employer, irrespective of the number of employers, shall register with the Funds as a contributing employer and shall make regular contributions for his or her employee. This was a departure from the previous provision which stated that institutions with more than five employees had to make contributions to the Fund.
A fortnight ago, Gender minister Betty Amongi said labour inspectors would take on the task of registering new members to reinforce NSSF staff.  

New leadership
At yesterday’s press briefing, Mr Ayota was flanked by Mr Gerald Paul Kasaato, the new acting deputy managing director, who is also the chief investment officer. 

The new leadership takes over as the Fund reels from nearly eight months of disrepute, birthed by allegations of mismanagement and impropriety, a probe by Parliament and an investigation by the Inspectorate of Government. 

Minister Amongi appointed Mr Ayota on August 18, taking over from his Mr Richard Byarugaba, whom he had deputised since 2017.  

The parliamentary probe report had recommended that Mr Byarugaba and Mr Ayota should resign to pave way for investigations and where possible be prosecuted for abuse of office, corruption, and conspiracy to commit a felony. 

While the report of the Inspector General of Government (IGG) was silent on Mr Ayota, it gave a mixed report on Mr Byarugaba.  The report said Mr Byarugaba had poor people management skills and recommended he refunds more than  Shs2.6b. But the same report praised Mr Byarugaba’s  performance that “dimmed” his misdeeds. 

Following the IGG’s report, Ms Amongi in a June 30 letter declined, as she had on a previous occasion, to renew the embattled executive’s contract. 

Mr Byarugaba is currently in court protesting his axing saying it is “malicious.”

However,  in  his first media engagement as substantive MD yesterday, Mr Ayota struck a confident tone that they have weathered the storm and are fit to take the Fund to the next level. 
He reported that during his tenure as acting deputy MD, the Fund has continued to perform well despite what he termed as “turbulence” over the last year.

“We had a target of collecting Shs132 billion per month. The six months ending December 2022 we were behind by about Shs51 billion. The six months following to June  2023, in the midst of the turbulence, contributions went up to between Shs150 billion to shs192 billion. We exceeded our target by Shs110 billion,”  Mr Ayota said.

Pledges
“We want to do everything to ensure we maintain that trust. Over the last eight months, we have learnt valuable lessons that will inform how we manage the Fund going forward. Every decision will be in the interest of the members,” he said.

His deputy, Mr Kasooto,  said real estate investment projects including Pension Towers and the Temangalo housing project will be completed next year. The 369-unit Lubowa housing project was completed, he said, adding that 16 individuals have made deposits to acquire some units. 
Mr Kasaato, a chartered financial analysts and accountant,  will serve for a period of six months or until a substantive deputy MD is appointed.

“Both of us are not new to the Fund, we believe this is a vote of confidence   by both the board  and the appointing authority, especially the Minister of Gender, Labour and Social Development, Ms Betty Amongi, and a sign that the Fund has a robust succession plan,” Mr Ayota said. 

Ms Margaret Rwabushaija, workers’ representative in Parliament, yesterday said: “You can think and fail to implement. So if there is commitment and membership increases, it will be important to us because workers will earn a higher interest. My concern is about when money is misused. I just pray for transparency in whatever they do.”