IGG Report on NSSF: Richard Byarugaba Speaks Out

Richard Byarugaba, the former Managing Director of the National Social Security Fund (NSSF) has spoken out about the just-released report by the Inspectorate of Government, saying he welcomed the report as it cleared him of the major allegations levelled against him.

“I welcome the report and I thank her and her team for such a great job that has been done.  The report clearly does resonate with what I’ve always said. That I am innocent and the accusations that were levelled against me, are baseless,”  Byarugaba told the media at a press conference held at the Kampala Serena Hotel in Kampala.

“We have done a diligent job at the fund without fear or favour. And the results are there for everyone to see. In fact, the IGG reaffirms that in her report. As I have said countless times my mandate when I was at the Fund was to grow and give savers a healthy return on their investment. That mandate I carried out diligently,” he added. 

The Inspectorate of Government, this morning released its report, into allegations of mismanagement, abuse of office and corruption by the former Managing Director of the National Social Security Fund (NSSF), largely exonerating him from many of the accusations levelled against him.

“Although he made some costly management and financial decisions, they pale compared to the robust (strong and healthy) status of the Fund during his administration, which happens to be the core mandate and key performance indicator of the Fund’s Chief Executive Officer,” Beti Kamya, the Inspector General of Government wrote, in a letter accompanying the report.

“Mr. Richard Byarugaba was the Chief Executive Officer of NSSF for 12 years having been appointed to the position of Managing Director in 2010. During his tenure of office, the Fund recorded a remarkable growth of accumulated contributions and net worth from approximately UGX 1.7 Trillion to approximately UGX 17 trillion (922%),” added Ms Kamya.

The investigation was made at the request of Hon. Amongi Betty Ongom (MP), the Minister Ministry of Gender, Labour and Social Development via her letter,  Ref. ADM.210/229/01 dated 5th January 2023 addressed to the Office of the Auditor General (OAG) and the Inspectorate of Government (IG). In her letter, Hon. Amongi asked for a joint investigation into allegations of mismanagement, abuse of office and corruption by Mr. Richard Byarugaba.  

During the course of investigations, the IG received a copy of a petition to H.E the President of Uganda by a group calling themselves “Representatives of Workers, NSSF Savers and Labour Unions” regarding the state of affairs at NSSF, most of which were similar to the issues already raised by the minister. Some of the other issues emanated from a Select Committee of Parliament that investigated the Fund over the same issues.    

The raft of allegations made by the Minister of Gender, Labour and Social Development, (MGSLD), Hon Betty Amongi Ongom, among others included claims that Mr. Byarugaba had made an exaggerated budget of UGX 400,000,000,000 for the purchase of land at Nakigalala Estate and that NSSF performance had been declining over the past four years. It was also alleged that Byarugaba took bribes and commissions through waiving NSSF contributions of workers of the Uganda Railways, and Uganda Broadcasting Corporation as well as arbitrarily reduced penalties that were to be paid by Tororo Cement. 

It was also alleged that the MD and the Head of Investments siphoned money out of NSSF through exorbitant expenditures on foreign trips and that the former Managing Director’s disciplinary record was wanting. Another allegation levelled at Mr. Byarugaba was irregularities in the procurement of the Pension Administration System (PAS) and that the MD had caused financial loss to the Fund by selling a plot of land in Mbarara City that belonged to the Fund at less than the market value.  On all these, the IGG did not find any evidence of wrongdoing.

Payments to staff and board members were a collective and legitimate decision

The IGG, however, recommended that Mr. Byarugaba and the Director for Finance, Mr. Stevens Mwanje to refund UGX 4,400,854,827 which she said, the duo irregularly authorised as payments to staff who exited under voluntary early retirement. In her view, these payments were “not backed by law and outside the provisions of Sections 87 of the Employment Act and Section 23.12 of the NSSF Human Resources Policy Manual, 2017”.

The IGG also ordered that the duo, refund UGX687,257,226 paid to board members who were compensated following their voluntary resignation from the board. The resignation arose out of the 2022 amendment of the NSSF Act, Section 3 (1)(6) which requires the NSSF Board composition to be inclusive and sensitive to gender, people with disabilities, skills and experiences. Upon this amendment, the Minister of Gender, Labour and Social Development directed that the Board be reconstituted to accommodate the amendment. Following the directives, two board members voluntarily stepped down and were compensated UGX687,257,226 in what would have been their board emoluments. It is this payment that the IGG wants Mr. Byarugaba and Mr. Mwanje to refund.  

Commenting about these recommendations, Byarugaba said the said payments were legitimate and had been approved by the board and he and the CFO were only implementing the orders of the board. 

“These were managerial and administrative decisions that were made lawfully and legally within the NSSF. These were not the personal decisions of the Managing Director or even the Head of Finance or the Director of Finance. And they were not aimed at enriching myself as an individual. These strategic decisions were made by the board and the organisation as a whole,” Byarugaba said.

“The board payments were authorised by the Minister on the resolution of the board, and there are minutes to this effect. The payments that were made to staff were the result of a restructuring exercise that was endorsed by the board and there are minutes to that effect. In addition, the restructuring process was conducted by a reputable and independent firm, Deloitte, Uganda who ensured it was transparent and fair.  My view is that if the IGG thinks these payments were irregular or unlawful, then, she should have ordered or recommended that the recipients of the money to refund it, because the recipients are known,” Byarugaba said.

He said that he hoped the NSSF would appeal the recommendations of the IGG, but if it declined to, he would consider appealing.

“I think the only thing that is appealable is the decision to repay the sums, but I believe that is a process which even the Fund can appeal because as you know, I didn’t do it as an individual. It was done by the company (NSSF). I only happened to have been the individual who signed the cheque and the CFO,” Byarugaba said.

“That (the decision to appeal) could be considered at some stage. I have all the options,” Byarugaba added.  

The findings of the IGG echo earlier findings by a Parliamentary Committee that investigated the same claims and dismissed them for lack of evidence and being personalised.

“The Committee notes that Hon. Betty Amongi Ongom’s allegations contained in her letter of 7th December 2022 justifying the deferral of re-appointment of the Managing Director were personalised to Mr. Richard Byarugaba yet the same would largely apply to Mr. Patrick M. Ayota, the Deputy Managing Director to the Fund since all initial decisions are taken at the management committee level where both MD and DMD participate for approval before they are sent to the Board for approval,” the committee noted with concern in their report. 

Both the Parliamentary Committee and the Inspectorate of Government investigations were sparked off by the Minister’s claims against the former Managing Director. Interestingly, the Parliamentary Committee instead found the Minister culpable of abuse of office and recommended that she resign immediately.

However, while the Parliament Select Committee that investigated NSSF found that the actions of the Minister of Gender, Labour and Social Development, Hon. Betty Amongi Ongom, in directing UGX 6 billion to be availed to her ministry in the NSSF budget amounted to an abuse of office, the IGG said that this was within her powers under Section 29(3) of the NSSF Act that allows her to amend the budget.

Now that a majority of the allegations the minister levelled against Byarugaba, which allegations were given as the reason for not reappointing Byarugaba have been cleared by the IGG, it remains to be seen if the Minister will go ahead to reappoint him. The reappointment had earlier been cleared by the Board, the Attorney General, the Prime Minister and the President.  

Byarugaba is credited for having led a robust growth of the Fund with with assets growing at an impressive compounded annual growth rate (CAGR) of 20% over the last 12 years (11 of which have been under him) from UGX1.7 trillion in 2009/10 to UGX17 trillion as the end of 2021/22⏤ a growth of over 10 times or 922%! 

During this time, members have year-in-year-out received interest rates above the 10-year aerate inflation rate. Customer satisfaction also grew to 86% and staff satisfaction to 94%.