The National Social Security Fund (NSSF) recorded an impressive performance on key financial indicators for the Financial Year 2017/2018, with total income hitting a record UGX 1.6 trillion before interest to members and taxes, Managing Director Richard Byarugaba has said.
The Fund’s total Assets Under Management (AUM) also hit UGX 9.98 Trillion as at June 30, 2018, a 26% increase from UGX 7.92 Trillion the previous Financial Year. This means the Fund keeps its place as the biggest social security fund in East Africa by value.
Addressing journalists at Workers House on Wednesday, NSSF Managing Director Richard Byarugaba attributed the Fund’s impressive performance to a favourable investment climate and an aggressive, yet prudent investment approach.
“Uganda experienced improved economic growth of 5.8% compared to 3.9% the previous financial year, which meant that generally, the investment environment saw significant improvements at a macro level. We were also aggressive in the market, seizing opportunities presented by growth in regional markets especially in Uganda and Kenya,” Byarugaba said.
According to figures released by the Fund, total income grew by 77% from UGX 912 billion in 2017 to UGX 1.6 trillion. This was primarily due to a rise in investment income and member contributions. The growth in income was driven by growth of interest income and strong recovery of regional equity markets. The depreciation of the UGX also increased the UGX value of our investments in the region.
Total member contributions also increased by 14% to UGX 1.05 trillion for the Financial Year 2017/2018 compared to UGX 917 billion the previous Financial Year.
“For the first time in the history of the Fund, we recorded over a trillion shillings in collections from our members. This is as a result of a steady rise in compliance level, now at 81% over a three months’ period, and contributions from the Fund’s voluntary members,” Byarugaba said.
Benefits paid to qualifying members rose by 29% to UGX 360 billion for Financial Year 2017/2018 from UGX 278 billion the previous Financial Year.
Byarugaba also said that the Fund continues to effectively manage its costs. The cost to income ratio declined by 1% to 12.6% for the Financial Year 2017/2018 from to 13.4% the previous Financial Year.
“We have not only grown more efficient in the way we do business, but we have maintained the required discipline to ensure high levels of productivity at the lowest cost possible. This is a commitment we made and we will continue to focus on creating value for our members at a low cost,” Byarugaba added.
Summary of the Fund’s 2017/2018 Performance
- The Assets Under Management (AUM) increased by 26% from UGX 7.92 Trillion in 2017 to UGX 9.98 Trillion in 2018
- Total Income increased by 77% to UGX 1.6 Trillion in 2018 from UGX 912 Billion in 2017
- Member contributions grew by 14% to UGX 1.05 Trillion in 2018 from UGXUGX 917 Billion in 2017
- Benefits paid out to qualifying members increased by 29% to UGX 360 Billion in 2018 from UGX 278 Billion in 2017
- Compliance Level rose to 81% in 2018 from 80% in 2017 leading to improved contributions
- Cost of Administration stayed flat at about 1.3%
- Cost to income ratio declined by 1% to 12.6% in 2018 from to 13.4% in 2017
