ANALYSIS: Are old ghosts returning to haunt NSSF?

The National Social Security Fund (NSSF) has of recent been in the news for all the wrong reasons.

At the heart of the happenings is the controversy surrounding the refusal to renew the contract of executive director Richard Byarugaba.

The latest now is that the Inspectorate of Government office has taken over investigations into alleged abuse of office, corruption and mismanagement of NSSF funds by Byarugaba.

This comes after President Museveni on December 22 ordered investigations into alleged abuse of the Fund by Mr Byarugaba.

Probably, most worrying for the savers is that the IGG, Beti Kamya, has frozen the NSSF accounts amid allegations of attempting to siphon Shs6b of workers funds into facilitating the budget of the Gender ministry as allegedly requested by Minister Betty Amongi.

Usher Wilson Owere, the embattled chairman of the National Organisation of Trade Unions, one of the constituent members of the NSSF Board, had earlier asked President Museveni to intervene and investigate  Minister Amongi over what he described as her undue interventions in the daily operations of the Fund.

He said she called the organisations to write petitions alleging corruption and other issues against Byarugaba, with the motive of failing his reappointment, especially for allegedly refusing to grant her request for Shs6 billion from the NSSF for her official activities.

But Minister Amongi explained that the planned activities are all in support of NSSF, particularly regarding contribution compliance by employers and also enhancing contributions. Specifically, according to her statement, the activities will include the holding meeting with private sector chief executives, meetings with ministries, departments and agencies of government, and four regional meetings “to sensitise citizens on their social security rights and obligations.”

Then last week, it also emerged that the government is planning to borrow Shs1 trillion from NSSF to finance the construction of Bwebajja offices, which are planned to house all government offices in one place.

NSSF is the largest pension fund in the countries of the East African Community, with assets worth Shs17 trillion.

However, there is concern that allowing the highly indebted government to borrow from NSSF means creating the risk of not paying back, hence miring the workers’ savings in another dead project.

Already, in September 2022, NSSF declared a single digit interest rate of 9.65 percent down from 12.15 percent in the previous year. NSSF attributed the low interest rate to the pay-out of the mid-term benefits, and the Covid-19 pandemic aftershocks.

But the current saga is also reminiscent of the past mismanagement of the Fund.

The Auditor General special audit report on the financial management of NSSF funds between January, 2005 and November 2008 revealed that NSSF lost billions in the sale of government bonds and in transactions in shares on the stock market. The report confirmed that irregular salary advances, allowances and loans were awarded to NSSF officials and staff in a manner contrary to regulations.

Eventually, the former NSSF Managing Director, David Chandi Jamwa, was jailed twelve years over causing financial loss to the fund.

Jamwa was found guilty of selling off several government bonds held by NSSF before their maturity dates to Crane Bank at prices below their then discounted value thereby causing an unfavourable price variance of Shs3,163,256,502.

However, NSSF board chairperson, Dr Peter Kimbowa, has moved to dispel these fears, insisting that the current investigations at NSSF are for the better.

“Our meeting is about business continuity and contingency planning given the expectations of our members in 2023 amid the many uncertainties around. Our job as a board is to provide an overall stewardship and oversight role,” he said.

“We are also working as much as we can to recover from the previous two years of lockdown and how the Fund can integrate and relevantly play a role in the national economic recovery framework,” he added.