NSSF to tap into oil and gas sector for wider coverage

Newly appointed National Social Security Fund (NSSF) managing director Patrick Ayota, addresses the media at their head offices on January 5, 2023. PHOTO | ISAAC KASAMANI.  

What you need to know:

  • Currently with 2.2 million members, the Fund plans to have enrolled half of the country’s fast-growing population by 2035.

Nearly a week after unveiling its Shs50trillion ambitions, the National Social Security Fund (NSSF) has entered into a partnership with the ministry of energy and mineral development to tap into the nascent oil and gas sector for membership growth.

“We are cognizant of the thousands of jobs created and those that will be created in the growing oil and gas sector and therefore believe that this strategic partnership will help us enforce social security compliance within the sector- in line with our new strategic approach that targets 50 per cent coverage of Uganda’s working population by 2035,’ newly appointed NSSF managing director Patrick Ayota said.

Ayota was speaking at a sensitization meeting for employers, regulators and other players in the energy, oil and gas sectors in Kampala on August 29.

Uganda’s oil and gas sector is expected to generate 100,000-150,000 jobs directly and indirectly. All these can be covered by the Fund either mandatorily or voluntarily according to the amended law.

Currently with 2.2 million members, the Fund plans to have enrolled half of the country’s fast-growing population by 2035.

Through the partnership with the energy ministry, the Fund also aims to drive up compliance in all agencies under the ministry of energy, which currently stands at 78 per cent.

All such entities as mandated by the amended NSSF Act, have been given six months to put their books in order and ensure 100 per cent compliance with NSSF remittances.

Horace Rwakaburete, the head of the compliance unit at the Fund revealed that while top government agencies like the petroleum authority and the oil companies have a high compliance rate, low compliance persists amongst subcontractors in the sector.

He urged the Petroleum Authority of Uganda (PAU), which is the sector regulator, to ensure all companies prove compliance before they are awarded any business in the industry.

Mineral Development state minister Peter Lokeris pledged their support to the Fund by ensuring social protection for workers.

“We are hereby instructing all companies involved in the oil sector, as investors, contractors, and operators, to put your NSSF books in order. NSSF has granted an amnesty to the sector until February 1, 2024, to register, update your staff contributions, and – where you are not compliant – negotiate a convenient payment plan. These steps will help you avoid hefty penalties,” he emphasized on Tuesday.

The revised law imposes a penalty of 10 per cent of the accrued arrears for noncompliance, which compounds monthly.

The law also redefined the employer to include government, subcontractors, registered business, partnerships and trustees, irrespective of the number of employees.