How Workers’ MP split NSSF Board

NSSF signed a memorandum of understanding (MoU) with the Central Organisation of Free Trade Unions (Coftu) months after a decision had already been taken to give money to the organisation.

Our investigations reveal that NSSF has been giving Shs400m every year to Coftu and the same amount to the National Organisation of Trade Unions (Notu), the other union that has representatives on the Fund board.

Sources in the Fund told this newspaper that the December 15, 2022 MoU signed with Coftu was to regularise a controversial attempt to increase the amount of money given to the trade union. Coftu is supposed to receive part of the Shs6b that Labour minister Betty Amongi directed NSSF management to carve out of the Fund’s budget for stakeholders, including trade unions.

The directive, which NSSF managers were opposed to, is one of the issues at the heart of the power fight between Ms Amongi and Mr Richard Byarugaba, whose contract as the Fund’s managing director, expired on December 1, 2022.

Mr Byarugaba and his deputy, Mr Patrick Ayota, are both past retirement age but the NSSF board recommended their reappointment on the basis of good performance. Although Ms Amongi reappointed Mr Ayota, she declined to reappoint Mr Byarugaba and instead directed the NSSF board to write to the Inspector General of Government (IGG) and have him investigated on allegations of corruption and mismanagement.

Coftu MoU

The MoU between the Fund and Coftu was drawn on December 15, 2022, but signed by Dr Sam Lyomoki, the Coftu secretary general, two days earlier, on December 13. Mr Ayota signed the MoU on behalf of NSSF.

On December 14, before the MoU had been officially drafted, and before it had been signed by NSSF, Dr Lyomoki wrote to NSSF referencing the MoU and acknowledging the receipt of Shs100m earlier allocated.

He, however, introduced three new areas for funding and asked for an additional Shs600m to be paid to Coftu.

“There is currently an ongoing consensus building on how much should be allocated this financial year to the other three pillars from the Shs6b that has been budgeted for the stakeholders,” he wrote.

He asked the Fund to release the balance of Shs300 million earlier allocated, and asked for a Shs600m share of the now-controversial Shs6b.

We were not able to establish whether the money had been paid. NSSF released a statement in the week saying it would not comment on matters that are under investigation by the IGG. On Friday, Parliament said it would announce a special committee on Monday to conduct a parallel investigation into NSSF.

Conflict of interest

Questions have arisen over the propriety of the proposed payments to the trade unions and other stakeholders, as well as possible conflicts of interest. Dr Lyomoki, who signed on behalf of Coftu and was involved in the discussion of the MoU, is a member of the NSSF board.

“In effect, a board member has written to NSSF asking for the Fund to pay money to an organisation over which he exercises control,” an official at NSSF told this newspaper. They spoke on condition of anonymity because they are not authorised to speak on behalf of the Fund.

“How will the NSSF management demand accountability for money given to someone who is supposed to supervise them? It is deeply problematic.”

The budgetary allocation has also raised questions elsewhere in government, with technocrats asking whether public institutions should fund organisations that supervise them.

After NSSF paid more than Shs7b to the Uganda Retirement Benefit Regulatory Authority in the 2021/2022 financial year, President Museveni stopped the payments. He argued that NSSF workers already pay taxes to the government which should be used to fund government agencies.

Polarising figure?

In an email to Minister Amongi and Finance minister Matia Kasaija last month seen by this newspaper, NSSF board chairperson Peter Kimbowa noted that Dr Lyomoki “underwent an investigation by a specially selected committee of the board in response to an allegation of unethical engagement with the head of investments.”

In response to the email, Dr Lyomoki wrote: “I shall not attempt to defend or justify myself. The grace of God shall be sufficient in all. You know the truth about the motivation for your letter and the anger of my colleagues towards me. I take responsibility and won’t try to defend myself but request God to forgive all of us and defend my case.”

Attempts by this newspaper to get a comment from Mr Kasaija on the government’s take on accusations levied against Dr Lyomoki were unsuccessful. The Finance minister did not take or return our calls by press time.

Museveni meeting

Our sources tell us that a thaw in relations between Dr Lyomoki and the vast bulk of members on the NSSF board appears unlikely. The relations were thrown into turmoil when the board met President Museveni last December after the standoff between Ms Amongi and Mr Byarugaba saw the Fund make headlines for all the wrong reasons.

We have established that—to the chagrin of other attendees of the meeting at State House Entebbe—Dr Lyomoki made a destructive mistake of remorselessly denigrat[ing] the entire board as a bunch of bare-faced liars” one attendee not authorised to speak on the issue, told us.

What ensued after the board members fired up their car engines and returned to their abodes was a frosty relationship between them on the one hand and Dr Lyomoki on the other. We understand that the board members are exasperated that one of their own cannot “observe [a] degree of decorum in and outside the boardroom.” They have since promised to share with responsible authorities “records of … boardroom sessions [to prove that Dr Lyomoki’s] conduct and behaviour falls below the standard and acceptable etiquette and decorum of a board member in an organisation with the sophistication and reputation of NSSF.”

Fall guy?

Responding to claims that he has sowed seeds of what one board member called “a disastrous confluence of half blackmail, character assassination and criminal manipulation”, Dr Lyomoki told Mr Kimbowa in a December 23, 2022, email that the NSSF board chairperson “know[s] the truth about the motivation for your letter and the anger of my colleagues towards me.” It remains to be seen how his attempt to project himself as a fall guy will play out.

Dr Lyomoki responds

Dr Lyomoki defended his conduct in an interview with this newspaper. “There is partnership involving NSSF and the other two workers federations, Notu and Coftu to empower savers and increase compliance and coverage. Money has not yet been given but the plan is to give both Notu and Coftu. Whatever is now being reported is against workers by negative forces to mask the truth,” he said.

Asked how he would supervise management that had handed him money, Dr Lyomoki said: “All stakeholders will participate and their legitimate structures. It isn’t money to individuals.”

Dr Lyomoki is not a stranger to controversy at the NSSF, despite only being on the board for just over a year. Our investigations reveal that the NSSF board conducted a special investigation into allegations that Dr Lyomoki had approached the Fund’s head of investments, Mr Gerald Kasaato, and demanded money before the manager’s contract could be renewed.

With reporting by Jane Nafula.