Prime
NSSF in the spotlight over Shs1.8 billion CSR budget
Left to right, front: Former NSSF Managing Director Richard Byarugaba and acting Managing Director Patrick Ayota appear before the Select Committee probing the Fund at Parliament yesterday. PHOTO | DAVID LUBOWA
What you need to know:
- Chaired by Mr Mwine Mpaka (Mbarara City South), the Select Committee, which is probing mismanagement of the NSSF, was shocked to learn of a Shs 1.8 billion budget previously allocated for Corporate Social Responsibility (CRS) activities.
Tension and drama yesterday brewed as the National Social Security Fund (NSSF) management team for the second time interfaced with the House’s Select Committee to make clarifications on a number of things.
Chaired by Mr Mwine Mpaka (Mbarara City South), the Select Committee, which is probing mismanagement of the NSSF, was shocked to learn of a Shs 1.8 billion budget previously allocated for Corporate Social Responsibility (CRS) activities.
The former Managing Director, Mr Richard Byarugaba, admitted this particular budget request came from the NSSF board following a [previous] meeting and “the request was a lower figure and we ended up pushing it to that figure [Shs 1.8 billion].
Mr Byarugaba then gave a breakdown of which individuals were allocated specific amounts of money.
“Gender Minister [Betty Amongi was allocated] Shs250 million, Board Chairman [Peter Kimbowa was allocated] Shs250 million, other board members were allocated Shs500 million,” he said.
He added: “Notu was allocated 400 million and Coftu 400 million, which brings it to Shs1.8 billion.”
The Central Organisation of Free Trade Unions (Coftu) and the National Organisation of Trade Unions (Notu) are workers’ unions.
Following the revelation, Mr Mpaka asked other staff of the NSSF team whether money from CRS budget is always accounted for
A staff from NSSF, who only introduced herself as Linda, responded that for the 10 months she has worked at the Fund, she has never seen accountability for CSR activity.
On this item, Mr Mpaka ruled, “Whether it was political pressure or not, whoever approved something that was illegal is going to beliable even you Mr Byarugaba, whether it was some kind of political pressure, if the Committee thinks this was illegal or misusing saver’s money, then everyone who was involved from the first step to the last, everyone who benefitted is going to be liable.”
The Shs20 billion loan previously lent to Uganda Clays Limited, a manufacturing company of baked clay building products in the country, was also among the hot topics of discussion.
Basing on the financial statements of 2009 and 2010 of Uganda Clays, Mr Mpaka asked the NSSF why they got savers’ money and invested it in a loss making company.
“The company borrowed money in order to expand in production. At the time, management of Uganda Clays sort out to set up a new factory in Mbale which was a good idea but baldy executed. The money they borrowed from us was not sufficient to put up the factory that they had wanted to set up in the right place. In fact, the products that were coming out of the factory after it was commissioned could not sale. The losses were quiet high, so, that is the reason why the company failed to repay the loan,” Mr Byarugaba said.
He added: “I think two or three years ago we literally took over the management and seconded two or three of our staff into the company and provided them with ways and means of trying to improve it and as I speak today, the company has turned around.”
According to Mr Byarugaba, NSSF was a large shareholder at Uganda Clays owing about 32 per cent of shares on the company.
“The company has become profitable and the company has re-instituted the loan on its books and the company is now in position to begin paying back the loan. Of course, they would have to pay it at an interest rate which has been agreed and to the Fund members, the assurance to them is that the money will be recovered,” he said.
Mr Byarugaba insisted that the loan has not been written off.
Mr Gerald Kasato, the Chief Investment Officer at NSSF clarified that the loan that was given to Uganda Clays was Shs11 billion, but it rose to Shs20 billion because of interest.
“Only that by 2015, they should have commenced payment and the interest and penalty had increased to Shs20 billion,” Mr Kasato said, adding, “ We have not recovered [it] but restructured it so as to make the company be able to repay. The restructuring was done in 2022.”
The probe continues today.
