Uganda's National Social Security Fund, has come under criticism for contributing little to the economy and poor product innovation. This is despite the fund growing its assets to Ush9.6 trillion ($2.5 billion) from Ush1.7 trillion ($451 million) in 2010.
“There is nearly Ush6 trillion ($1.6 billion) lying idle on NSSF’s balance sheet that could have been invested in infrastructure projects which would have lowered the cost of government borrowing,” said civil society activist Julius Mukunda.
Ongoing infrastructure projects include the 77km Kampala-Jinja Express Way valued at $1 billion and the 231km Kampala-Mpigi-Kagitumba-Rusumo highway estimated at $376.5 million.
Mr Mukunda added that NSSF would have done better for small contributors including business owners, by setting up a credit fund for loans of upto Ush10 million ($2,653).
NSSF’s total monthly income has grown to Ush60 billion ($15.9 million) to date, according to Patrick Ayota, the fund’s deputy managing director.
These revenues are generated from interest on Treasury-bills and bonds plus fixed deposit accounts held in commercial banks.
Total monthly collections have grown from around Ush15 billion ($3.98 million) in 2010 to an average of Ush50 billion ($13 million) to date.
The fund’s membership base has risen from about 250,000 to more than 1.5 million within the same period. About 800,000 contributors remit roughly Ush120,000($31.8) each, per month.
But a former senior employee at NSSF said had it invested in the economy, local businesses would have benefited greatly and expanded, thereby contributing more to the fund.
The fund provides three products: Old age benefits, survivors’ benefits and invalidity benefits. Total benefits paid by the fund rose by 16 per cent to Ush278 billion ($73.7 million) in 2017, according to NSSF’s financial statements.