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The Nation Social Security Fund (NSSF) has announced its earnings increased by 16% from UGX 2.2 trillion to UGX 2.53 trillion for the Financial Year ended June 30th 2024.
The Fund is therefore set to pay a competitive interest rate to its savers which will be declared by Finance Minister, Matia Kasaija at the 12th Annual Members Meeting on August 26th.
Addressing the media at the NSSF Annual Media Roundtable, NSSF Managing Director Patrick Ayota attributed the growth to an increase in interest income earnings, dividend income as well as real estate income.
“Income from all three asset classes we invest in increased this last financial year compared to the previous one. Interest income increased from UGX 2 trillion to UGX 2.34 trillion, dividend income from our listed and unlisted equities increased from UGX145.1billion to UGX175 billion and income from our real estate investments also increased from UGX11.9 billion to UGX 13.3 billion,” Ayota said.
The Fund’s strategy in real estate development is to leverage its sound financial position to increase returns to its members. This is done by providing housing, and modern commercial office space to encourage national development, and reduce the housing deficit in the country in line with the Government plans. The Fund holds real estate assets to realise capital gains and earn income.
NSSF is also currently running multiple real estate projects including; the Pension Towers which is a smart intelligent and modern commercial complex comprising of 3 Towers (up to a max height of 32 floors).
The total built-up area is approximately 75,000m2 and will house office and retail space. The project has frontage on both Lumumba Avenue and Nakasero Road. Construction works are ongoing.
NSSF also runs the Solana project, a 550-acre mixed-use development encompassing a mix of residential, commercial, retail, leisure, hospitality and public open spaces. Conceptualised to be a self-sustaining development of about 3,000 housing units of various categories, the site is set within the existing upmarket suburb of Lubowa.
The Temangalo Housing project is a mixed-use affordable housing project under construction on 463.87 acres of land situated in Temangalo, Wakiso district, just 17 km from Kampala City Centre. It will comprise 3,500 houses of various types, retail and commercial spaces, community amenities including education, health and social facilities, a large neighbourhood green area/park, and associated infrastructure including roads, electric power, sewage drainage and water supply.
Construction of Phase 1 started in October 2021 and comprises 550 units – 200 bungalows, 100 townhouses, 50 villas and 200 apartments, with the starting price being UGX 90,000,000.
Gerald Kasaato, the NSSF Deputy Managing Director said, the price points for the real estate projects are competitive in value and size.
Ayota added that the Fund’s performance mirrors an improvement in the overall investment environment in Uganda and across East Africa.
“Our analysis shows that although it was not without challenges, across East Africa, it was a better year compared to the Financial Year 2022/2023. The Ugandan economy recovered and recorded a 6% growth in GDP, inflation remained under control, regional stock markets recovered and the interest rates slightly increased,” he said.
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In addition to growth in its revenue, the Fund had a better year across other key performance indicators, including growth in assets under management, contributions collected, benefits paid, and cost management.
“During the year, we recorded a milestone in asset growth, achieving our target of growing the Fund to UGX 20 trillion by 2025 more than a year in advance. Our assets under management as of the end of June 2024 stood at UGX22.13 trillion, an increase of 19.2% compared to the previous year. We still hold our top position as the largest Fund by value in East Africa,” Ayota said.
The Fund’s member contributions increased by 12.2% from Ugx1.72 trillion in the Financial Year 2022/23 to Ugx 1.93 trillion in the Financial Year 2023/24 and the cost of administration dropped from 1.02 to 1.00% of total assets,” he added.
Unlike the previous year, however, the amount of money paid in benefits reduced from UGX 1.199 trillion in the Financial Year 2022/23 to UGX1.120 trillion in the Financial Year 2023/24.
Ayota explained that the reduction was driven by a drop in the number of people who claimed benefits from 48,115 in the Financial Year 2022/23 to 44,250 in the Financial Year 2023/24. For instance, the mid-term benefit payments dropped from Ugx272.2 billion to Ugx176.6 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 value of their money. This is a responsibility we do not take for granted,” Ayota added.
He explained that the Fund has embarked on Vision 2035 which includes growing the Fund to UGX 50trillion, extending social security coverage to 50% of Uganda’s working population, and ensuring service levels satisfaction of 95%, all by 2035.
Barbara Arimi, the NSSF Head of Marketing and Corporate Affairs, said NSSF has a more compelling financial literacy programme to improve on the savings culture of Ugandans and attract more voluntary savers to the Fund.
| FACT SHEET – June 30, 2024. | |