NSSF members’ interests, money must be secured

Saturday March 04 2023
Uganda's managing director Richard Byarugaba

Uganda's Managing Director Richard Byarugaba. PHOTO | FILE | NMG


What started as behind-the-scenes manoeuvres to get rid of the chief executive at Uganda’s National Social Security Fund has morphed into a hydra-headed monster that is now threatening to claim even the scalps of its instigators. After weeks of intense investigations, the report of a select committee of parliament appointed to look into the affairs of the NSSF is out with sobering, if predictable, findings.

Much as the fund has registered stellar growth under the stewardship of the now much vilified managing director Richard Byarugaba, it remains the target of buzzards determined to get a slice of it by whatever means. The executive suite operates under immense pressure from political heavyweights, so much so that how it is managed in the end depends on personal character and grit.

Triggered by a contest over the re-appointment of the chief executive, the just concluded inquiry stemmed from a succession crisis when the contracts of both Mr Byarugaba and his deputy Patrick Ayota tapered off.

Well past retirement age, the duo was ineligible for reappointment under the rules governing the fund. But, owing to their record and the growth the fund registered under their watch, the board’s view and public consensus was that their tenure be extended under contract. While Ayota’s contract was renewed, Byarugaba’s became a protracted smear campaign in social media, painting him as sitting on a mountain of scandal.

High levels of nepotism

In the event, the inquiry failed to find evidence of many of the allegations. But it did find evidence linking the campaign to Byarugaba’s refusal to sign off Ush6 billion ($1.6 million) of savers’ funds to facilitate certain activities by the Minister for Gender and Labour. The probe committee also found issue with some of the investment decisions at the fund, high levels of nepotism and illegal compensation to board members.


Key among the probe committee’s recommendations is the resignation of the Labour minister in the public interest, disbandment of the entire governing board and the sacking of Mr Byarugaba and his deputy. The recommendations are spot on, but fall short in that they don’t quite solve the foundational issues at NSSF.

A major problem at the fund is the distribution of power. The major stakeholders — the savers and their employers who actually contribute the seed capital — are mostly marginalised in decision making.

The general perception of the wielders of political power is that the savings at NSSF have no owners and that decisions over how to spend them are the preserve of politicians and civil servants, many of whom don’t hold any savings there. Political expediency has, on a number of occasions, forced the fund to spend members’ savings on projects that are not quite sound. Amid a weak environment of crime and punishment, the few individuals on the board who are supposed to look out for savers’ interests are easily incentivised to join, rather than fend off, the predators.

The probe committee should be lauded for calling out the minister. But to cure NSSF, there’s a need to make its processes more transparent, realign the balance of power and to punish any infractions without fear or favour.