The National Social Security Fund (NSSF) has declared 11.23 percent as interest on members’ contributions for 2016/17.
Finance Minister Matia Kasaija, represented by his deputy Evelyn Anite, declared the interest rates at NSSF’s annual general meeting in Kampala.
The interest is less than the 12.3 percent interest the Fund declared for the previous year.
Members in attendance were less enthusiastic about the announcement, although it is impressive in the market.
The NSSF Uganda Managing Director, Richard Byarugaba, says although the interest rate reduced, it is nonetheless above the 10-year inflation rate of 8.6 percent.
Byarugaba attributes the reduction to subdued economic environment, especially reduction in central bank rate from 17 to the current 10 percent.
Byarugaba also cites the capping of interest rates which affects NSSF’s investments in treasury bonds and equity.
NSSF Uganda, under the NSSF Act and Uganda Retirement Benefits Regulatory Authority Act, is mandated to invest within the East African Community.
Byarugaba says of the 916 billion shillings in revenues, the Fund is paying 87 percent, about 681 billion shillings in interest to members.
Byarugaba says the Fund also paid benefits to members totaling 278 billion shillings, up from 238 billion shillings the previous year.
He says operating costs increased to 96 billion shillings on account of investments in workers and legal costs.
The fund, adds Byarugaba, also paid 131 billion shillings in taxes mainly in withholding tax on treasury bonds and stocks.
Minister Kasaija thanked the Fund for outperforming the economy, and encouraged the board and management to increase their performance.