NSSF FY 2022/23 earnings increase by 15% to reach UGX2.2 trillion

Despite significant market turbulence home and away, Uganda’s National Social Security Fund’s (NSSF) revenue increased by 15% from UGX1.9 trillion to UGX2.2 trillion for the Financial Year ended June 30, 2023, Managing Director Patrick Ayota has announced.

Addressing the media at the NSSF Annual Media Roundtable, Ayota attributed the growth to increased earnings from interest income from UGX1.79 trillion to UGX2 trillion and dividend income which grew from UGX84 billion to UGX139 trillion. Income from the Fund’s real estate projects also slightly increased from UGX13.4 billion to UGX14 billion. “Other income” also increased to UGX16 billion.

“Overall, the investment environment in Uganda and the region was challenging over the last Financial Year. However, the Fund was able to increase its revenue owing to strategic asset allocation that enabled us to remain profitable, despite a generally depressed market,” he said.

He said that although inflation remained under control at 4.8%, the reduction in the value of the stock markets in Uganda and Kenya, the appreciation of the Uganda Shilling against the regional currencies, and the reduction in long-term bond yields increased pressure on the Fund’s performance. 

“For us to post a 15% increase in revenue shows our resilience and an astute investment risk balance,” Ayota added.

Overall, the Fund said, long-term bond yields dropped compared to the last Financial Year. 

“For instance, on a year-on-year comparison as of 30^th June 2023, the 10-year bond yield dropped from 15.600% to 14.788%, the 15-year bond yield dropped from 16.194% to 15.291% and the 20-year bond yield dropped from 17.6345% to 15.313%. In addition, the stock markets in Uganda, Kenya, Tanzania, and Rwanda suffered a reduction in value. The Uganda Securities Exchange Local Index was reduced by 11.47% the Nairobi Stock Exchange All Share Index reduced by 14.04%, the Tanzania Stock Exchange Share Index reduced by 4.02%, and the Rwanda Stock Exchange reduced by 2.27%,” the Fund said in a statement.

The Fund also said, there was a significant appreciation of the Ugandan Shilling, against major currencies, mainly the Kenya Shilling which depreciated by 22.2% against the Uganda Shilling.

Regardless of the turbulence in the markets, Ayota said that the Fund’s financial position is stable and the Assets Under Management continue to grow.

“Our Assets Under Management (AUM) increased from UGX17.26 trillion in Financial Year 2021/22 to UGX18.56 trillion in Financial Year 2022/23. This growth was driven by an increase in member contributions, increased realized income, and a cost management strategy that enables us to create more value for the member at a lower cost compared to the previous Financial Year,” he said.

“In fact, the current asset base, we project that the strategic goal of growing the Assets Under Management of UGX20 trillion by 2025 will be achieved by June 30, 2024, one year ahead of schedule,” Ayota added.

Member contributions increased by 15.4% from UGX1.49 trillion in Financial Year 2021/22 to UGX1.72 trillion in Financial Year 2022/23, while the cost of administration reduced from 1.18% to 1.02%.

Ayota assured NSSF members that the Fund is in a better financial position going forward and the focus has now shifted to ensuring its long-term sustainability.

“Our new “Vision 2035” is the bedrock of our long-term strategic focus– where we want to grow the Fund to UGX50 trillion, cover at least 50% of the working population, and achieve 95% and both customer satisfaction and staff engagement,” he said.

Financial Year 2023/24 Performance Summary 

1. Assets Under Management (AUM) increased by 7.5% from UGX17.26 trillion in Financial Year 2021/22 to UGX18.56 trillion in Financial Year 2023/24.

2. Member contributions increased by 15.4% from UGX1.49 trillion in Financial Year 2021/22 to UGX1.72 trillion in Financial Year 2022/23

3. Total Realised Income earned increased by 15% from UGX1.9 trillion in the Financial Year 2022/22 to UGX2.2 trillion in the Financial Year 2022/23

4. Benefits paid to qualifying members increased by 1% from UGX1.189 trillion in the Financial Year 2021/22 to UGX1.199 trillion in the Financial Year 2022/23. 

5. The cost-to-income ratio improved from 11.7% in the Financial Year 2021/22 to 9.4% in the Financial Year 2022/23

6. Cost Management – our cost of administration reduced from 1.18% of total assets to 1.02%. 

7. Rate of Compliance slightly improved from 55% in Financial Year 2021/22 to 57% in Financial Year 2022/23

8. Customer Satisfaction increased from 83% in the Financial Year 2021/22 to 86% in the Financial Year 2022/23

9. Staff Satisfaction slightly reduced from 85% in the Financial Year 2021/22 to 82% in the Financial Year 2022/23