Uganda’s National Social Security Fund (NSSF) saw its earnings rise by 15% to Shs 2.53 trillion for the financial year ending June 30, 2024, driven by gains across its investment portfolio, according to the fund’s Managing Director, Patrick Ayota.

Speaking at the NSSF Annual Media Roundtable in Kampala, Ayota attributed the growth to improved interest income, dividends, and real estate returns.

“Income from all three asset classes we invested in increased this last financial year compared to the previous one,” Ayota noted. “Interest income grew from Shs 2 trillion to Shs 2.34 trillion, dividend income from listed and unlisted equities increased from Shs 145.1 billion to Shs 175 billion, and real estate income rose from Shs11.9 billion to Shs 13.3 billion,” he said.

Ayota said the fund’s performance reflected broader improvements in Uganda’s investment environment, as well as in the East African region.

“Our analysis shows that, although not without challenges, the region had a better year compared to FY 2022/2023. The Ugandan economy recovered with 6% GDP growth, inflation remained under control, regional stock markets bounced back, and interest rates slightly increased,” he said.

The strong performance this year points to the likelihood of double-digit interest rates for savers, as Uganda’s Finance Minister, Matia Kasaija, is set to announce contributors’ returns later this week.

For over a decade, with the exception of the 2021/22 financial year when contributors received 9.6% interest, savers have consistently earned annual interest rates of 10% or more on their contributions.

In addition to its revenue growth, the NSSF exceeded key performance targets, including asset growth, contributions collected, and cost management. The fund’s assets under management hit Shs 22.13 trillion, a 19.2% increase from the previous year, surpassing the fund’s Shs 20 trillion target for 2025 well ahead of schedule.

“During the year, we achieved a milestone in asset growth, achieving our target of growing the fund to Shs 20 trillion by 2025 more than a year in advance. Our assets now stand at Shs 22.13 trillion, securing our position as the largest fund by value in East Africa,” Ayota stated.

Member contributions rose by 12.2%, from Shs 1.72 trillion to Shs 1.93 trillion year-over-year, while the cost of administration dropped to 1.00% of total assets, down from 1.02%.

Benefit payments decline

The fund paid out Shs1.12 trillion in benefits, down from Shs 1.199 trillion the previous year. The decrease was linked to a drop in the number of claims from 48,115 to 44,250. Mid-term benefit payments saw a sharp decline, falling from Shs 272.2 billion to Shs176.6 billion.

“People who qualify to withdraw their savings are opting not to because they trust the fund to not only ensure safety but also growth in the value of their money. This is a responsibility we do not take for granted,” Ayota added.

Looking ahead, the NSSF has embarked on its Vision 2035 strategy, which aims to grow assets to Shs 50 trillion, extend social security coverage to 50% of Uganda’s working population, and achieve a 95% customer satisfaction rate by 2035.