NSSF savers to get 11.5% interest 

Contributors to the National Social Security Fund (NSSF) will receive 11.5 percent interest they earned this year, Finance minister Matia Kasaija announced Thursday.

"As per Section 36(2) of the NSSF Act (Cap 230), for the Financial Year 2023/24, I declare an interest rate of 11.5 percent," Mr Kasaija announced.
According to him, this year's interest rate is above the 10-year average rate of inflation currently at 4.2 percent, and the 2023/24 inflation which stood at 3.9 percent. 

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It is slightly above Shs2 trillion, the highest amount of money ever paid in interest to members. 

Per Section 36 (1) of the NSSF Act, the new interest will be calculated and credited on the balance outstanding on the members’ accounts as at July 1, 2023. 
According to the minister, government is pleased with the stability and continuity at the Fund over the last year, as evidenced by the growth registered.

"As the Minister of Finance, Planning, and Economic Development, I am interested in about 3 things: Is the Fund financially stable and growing? Is the Fund investing in the right assets and sectors of the economy? Is the Fund preserving and growing the value of members’ savings? Going by the Managing Director’s performance report, which is confirmed by the Auditor General’s independent report, I am pleased that all the 3 questions have been answered in the affirmative," Mr Kasaija said.

The Fund has grown from Shs18.56 trillion in Financial Year 2022/23 to Shs22.13 trillion in 2023/24, an increase of 19.2 percent, according to Mr Kasaija.

He said the Fund is investing in the right assets in fixed income, real estate, and equities. 

"The delicate balance between risk and return is demonstrated by the concentration primarily in Fixed Income (79.2 percent), which is by far the safest investment asset. The Fund is preserving and growing the value of members’ savings having consistently paid more than 2 percent above the 10-year average rate of inflation for more than 10 years and counting," Mr Kasaija said.

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His remarks came after the Fund's managing director, Patrick Ayota said they had reached Shs20 trillion target for June 2025 earlier this year, approximately 18 months ahead of schedule.

"Last year, we collected Shs1.9 trillion on your behalf and generated interest that was credited to your account. For every shilling spent on expenses, we created a value of 18 shillings. In comparison, Kenya's figure stands at 8 shillings, while Tanzania's is 5 shilling," Mr Ayota said.

The Fund is now targeting to grow to Shs50 trillion and cover half the population by 2035. NSSF investments are held in treasury bonds (79.2 percent), equities (13.1 percent) and real estate (7.7 percent). 

Member contributions have increased from Shs1.72 trillion to Shs1.93 trillion year-on-year. This, Mr Ayota said, was evidence of the confidence Ugandans have in NSSF. 

NSSF paid out Shs1.1 trillion in benefits over the past year and the total amount of mid-term benefits claimed, which kick in at age 45 and after 10 years of contributions, dropped from Shs272.2b to Shs176.6b. 

Despite the overall positive performance, compliance remained low, with only 57 percent of members remitting their savings consistently. NSSF also missed a deadline for the completion of construction of the Pensions Tower, which has been under construction for more than a decade. The investment in Uganda Clays, a building materials maker, also remained loss-making, despite year-on-year growth in the country’s construction sector.