Why Byarugaba’s NSSF contract isn’t renewed

Former National Social Security Fund (NSSF) Managing Director Richard Byarugaba. Photo | File

What you need to know:

  • Whereas sources claim Amongi withheld her signature on Mr Byarugaba’s contract over a refusal to approve Shs6b she requested, the former says investigations are underway in some dealings.

On December 1, National Social Security Fund (NSSF) Managing Director Richard Byarugaba sent a three-paragraph sign-out email to staff with a subject line that “hope to see you again, maybe!”

Up until this moment, the day his five-year contract was terminated, the outgoing chief executive was certain to continue holding his job.

After all, on November 25, the chairperson of NSSF Board Peter Kimbowa had written to Gender and Labour minister Betty Amongi, the appointing authority, recommending that Mr Byarugaba and his deputy, Mr Patrick Ayota, be reappointed for another five years each.

Separately, Attorney General Kiryowa in a legal opinion to the Ministry of Gender and Labour Permanent Secretary on the same day, noted that the NSSF Act, as amended, did not set upper age threshold for its managing director and nothing in law prevents the line minister from reappointing Mr Byarugaba if the Board recommended so.

Highly-placed sources said the Board decision followed a meeting its members had with Prime Minister Robinah Nabbanja, to the exclusion of Ms Amongi, and after an earlier high-level meeting chaired by President Museveni.

Present at State House deliberation were the premier, Kiryowa Kiwanuka, minister Amongi and her Finance counterpart Matia Kasaija who is the political co-supervisor of the workers’ pension fund. That meeting, according to sources that attended it, praised the performance of the Byarugaba-Ayota team in growing the Fund by about Shs8 trillion over 12 years and, while citing the need to appreciate the honchos, left it up to NSSF Board to determine their fate.

Following lengthy deliberations, the oversight body communicated its decisions in a November 25 letter to minister Amongi whose mandate under the amended NSSF law include, among others, appointing the managing director and deputy on the Board’s recommendation, approving budget of the Fund, driving membership and contribution and handling labour-related issues.

On the other hand, Finance ministry, which until the amendment of the law this year was the sole supervisor of the Fund, is now responsible for investment and finance decisions.

“Guided by the provisions of the NSSF (Amendment) Act, 2022, specifically Sections 39 and 40 with respect to the appointment of the managing director and deputy managing director, the Board resolved to recommend to you as follows,”Mr Kimbowa wrote in his letter referenced ATI/CONF/02-22.

He added: “That Mr Richard Byarugaba be appointed as managing director of the National Social Security Fund to serve for a period of five years from the date of expiry of his current contract [and] that Mr Patrick Ayota be appointed as deputy managing director … to serve for a period of five years from the date of appointment.”

The Board also asked that the minister in the instruments of appointment details “key areas of performance and reporting obligations for the term of service and that you delegate the Board to monitor their performance on your behalf, or as you will advise”. Based on these recommendations, Mr Byarugaba knew he was well on course to lead the Shs17 trillion Fund for 17 years. But on his last day, minister Amongi instead renewed the contract of Mr Ayota and appointed him as interim head of the Fund pending the outcome of “further consultations” before a final decision.

Asked yesterday why she did not give Mr Byarugaba a fresh mandate and renewed Mr Ayota’s contract, yet NSSF Board recommended both to continue in their jobs, minister Amongi said: “There are petitions with allegations of financial impropriety in relation to the Fund, which require further consultations at higher levels before I can sign [renewal of the contract].”

Several government agencies are investigating allegations that the cost of building the Pension Towers, the Fund’s high-rise building on Lumumba Avenue in Kampala, has questionably been revised upwards by more than $10m (Shs37b) and that President Museveni’s name had been irregularly invoked to initiate purchase of land, at Shs400b, by NSSF from one of the biggest sugar producers in the country.

Investigators also want to establish if all employers already enlisted by NSSF have registered all their eligible employees and are actively contributing, or whether some money is leaking through collusion by some Fund staff.

It is further alleged that NSSF, under Mr Byarugaba, turned down a proposal from influential quarters to inject some cash from the Fund to buy machinery under Uganda Grain Council to clean up Uganda’s maize after Kenya rejected exports over high aflotoxine levels.

Questions have also been raised about the way the Fund management went around with its intention to contract out the construction of a commercial/office development on Yusuf Lule Road.

Mr Byarugaba was unavailable yesterday to comment on the matter.

Highly-placed sources, however, claim that minister Amongi withheld her signature on Mr Byarugaba’s job because the Fund, under his management, declined to approve her June 16 request for Shs6 billion for, among things, oversight, budget monitoring and accelerating recruitment of new NSSF contributors including some 250,000 targeted Ugandan labourers in the Middle East Alone.

Minister Amongi yesterday declined to respond to the claims, referring this publication to comments last month by NSSF Board chairman Peter Kimbowa that the Shs6b had been duly approved in the current budget alongside a detailed work scheme.

Our analysis of the budget shows that the Shs6b was chopped off Shs10b that the Fund had allocated for team-building, travel, and meals. The reallocation, according to the budget document, is to cater for joint Board-staff-and Labour officers on-spot inspections around the country to verify membership inventory and recruit new ones from private sector and volunteers, which the revised law permits and also enlist new members from the Diaspora.

Sources, speaking on condition of anonymity due to the sensitivity of the matter, said minister Amongi had long intended to push out the MD by first asking him on July 22 to retire after clocking 60 years and, after the deputy Solicitor General okayed Mr Byarugaba’s continued stay in office, letting his contract to run out.

After Ms Amongi asked both the MD and his deputy to leave after attaining the retirement age, Mr Ayota complied and was reappointed initially for three years before it was revised to five years after Mr Byarugaba declined to retire or accept a less than five-year new mandate.

President Museveni had cautioned Gender and Labour minister against asking the top Fund managers to leave on the account of age, noting in an August 6 letter that “it is better one consults quietly about these appointments before deciding.

“In the case of NSSF, the present group seem to have done a good job … good performance is not very common in parastatals. Where it occurs, the actors should be appreciated,” he noted before calling for a meeting to discuss the matter.

After the meeting which took place last month, details of more rot within the Fund bubbled to surface, with alleged abuse of finances on NSSF’s dormant and suspense accounts. Insiders said the money credited on suspense account are remittances by employers of mainly expatriates who are not registered as NSSF members and do so when out of their jobs. On August 27, 2019, a South African national named Sifiso Simela Biyomo, who previously worked with Air Uganda, had his deductions remitted to NSSF as do many other expatriates. He visited Entebbe branch office of the Fund to process his claims.

The relationship manager promptly registered him under number 831870111199016, but data analysts found his particulars including photograph were not only in the system, but that he had also claimed his money using Uganda National ID number CM59060102FJGA.

The ID never belonged to him and he had not made any claims, internal auditors of the Fund established, leading to an expanded investigation into how the scheme was contrived and executed.

In an October 14, 2019 internal memo, Mr Geoffrey Barigye, the head of Internal Audit, reported to Board members and MD Byarugaba, his deputy Ayota and Corporation Secretary Agnes Isharaza that “six non-registered members had been irregularly registered, their suspense records cleared and age benefits for more than Shs113 million had been processed and paid under the same fraudulent scheme”.

The suspect is a one Joseph Sooka, a Fund relationship manager, who has since been charged at the Anti-Corruption Court with several counts of embezzlement, forgery, money laundering and uttering false documents.

Investigations show that the Shs113 million is a small part of a fraud where money lost from the suspense account runs possibly in several billions.

It is alleged that Mr Sooka, who has since disappeared, used two of his accounts with one of the leading commercial banks in town, mobile phone mobile money accounts and accounts of six other persons he is related to by blood or business to wire the monies.

Our investigations show that a flurry of high-level executive meetings are scheduled to run back-to-back this week, and a final decision on whether or not to renew Mr Byarugaba’s contract will follow.

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