NSSF continues to be an enigma in the lives of Uganda’s Workers

This is my article which was published by The Independent on January 15, 2010

The National Social Security Fund (NSSF) has for long remained in the press for wrong reasons. Yet, it continues to intensify its recruitment drive of contributors. While ordinarily social security or social protection is a right enshrined in very many human rights instruments, for the case of NSSF, contributors save with it not because they know NSSF is an institution that would guarantee their right to social protection but they do so because it is mandatory. In fact, while addressing members of National Union of Educational Institutions (NUEI), Makerere University Branch, Mr. Alinda Kimomi, NSSF Area Manager, Kawempe, said the university staff that are saving their money with DAP are infringing the law. I learnt two things; one, the NSSF Management/Staff and government are the biggest beneficiaries of the workers’ savings and two, both government and the NSSF Management/staff now believe that man is meant to serve the law and not the law to serve man. That is why workers are cajoled into registering with NSSF whether or not they like it. I have read the NSSF Act and I find it greatly wanting thus needing thorough overhaul.

Alinda disclosed to the workers that NSSF lost money to Safari Com and that it also lost money to some foreign currency and that the currency also tumbled. The argument he gave was that it was a global trend and the NSSF management had nothing to do about it. He accordingly, called on the NUEI staff to encourage their friends to register with the Fund. Alinda furthermore disclosed that NSSF is very rich because the fund is worth 1.2 trillion. The question then should be: how much does the contributor benefit when this financial year’s interest on the workers’ savings is a paltry 3%.

The NSSF Managers are themselves quite interesting. I say interesting because Alinda frankly told the NUEI members that the law forbids the fund from giving an interest of less than 2.5 percent. That the workers cannot be paid 1% or 0% yet he had already told them before that NSSF is like a business and that if business makes losses the shareholders share the losses and if it makes profits, they share the profits. I surmise that had they been not hindered by the law, the Fund Managers would choose to always declare negative interests arguing that they have incurred losses.

I wish to state categorically clear that the workers have rarely made any profit on their savings because in 2008 when the interest was declared 14% after reportedly making huge profits, the inflation rate was reportedly oscillating between 14 to 16% although the Fund Managers say it was 11%. Assuming the inflation was 11% that is the only year when NSSF contributors made a paltry profit on their saving of 3%. The question then is: if NSSF is a business which it is, whose business is it? Is it for the workers who never make any profit on their savings; is it for the NSSF Managers or is it for the government? Maybe, the NSSF business is a joint venture between workers on one hand and Management and government with the former incurring losses while the latter reaps the profits. More often than not the Fund Managers and the government are inextricably linked for they are often appointed on patronage basis.

The NSSF can convince the contributors – employers and workers that it is a business if it makes profit and the workers benefit from the profit made. Otherwise, it will be difficult to convince many of us that it is a business worth its salt if it has specialized in making losses to the contributors. I am not one of those people that can be confused to think that the Fund doesn’t make profit. Indubitably, it generates profit on the workers’ savings but the Management doesn’t want to disclose it to the workers or it is directed courtesy of powers from above not to disclose the profits and henceforth share them with the contributors.
The National Social Security Fund (NSSF) is one of the richest institutions. This is the explanation that was given at the time the fund management was transferred from the Ministry of Gender, Labour and Social Development (MGLSD) to the Ministry of Finance. The lame argument that was given is that MGLSD had no technical expertise to handle huge sums of money as though the government was barred from hiring experts to handle those huge sums of money. Why NSSF contributors never benefit from those huge sums of money is an enigma.
We have always argued that corruption begets corruption. In July 2008, NSSF recruited huge numbers of staff. But many of those that were recruited had earlier entered through connections and were up to that time working as volunteers. Although many or all of the recruited staff have the requisite credentials, the method of entry is suspect and they can be used to satisfy the interests of those that helped them enter. In any case there are many people out there with the requisite if not better credentials to serve such an institution. I would expect a reputable organisation which claims flowery values to place an advert in the press for every interested person to apply. I have also written about the counterfeit employees that were chased from the organisation whom the former Managing Director David Chandi Jamwa wrote they were going to get their benefits yet they attained jobs illegally using fraudulent documents. I argued that these people should be sent to Luzira instead of giving them more money.

The practical step that can minimize on the NSSF mismanagement and inefficiency is liberalizing the social security scheme to allow many prayers akin to what it is with the Banking sector. If one is disenchanted with Barclays they shift to Centenary and so forth. Ironically, the NSSF Managers and staff are already predicting doom arguing that some unscrupulous investor may run with the workers’ huge sums of money. Why are such fears not raised with the Banks which also collect huge sums of money not only from hundreds of thousands (as is the case with NSSF whose membership is reportedly around 500,000) but from millions of people including workers, the unemployed, students among others? What is sauce for the goose is sauce for the gander. I have a hunch that both the NSSF Management and the government have ulterior motives for opposing the liberalization of the social security scheme and I guess, as we approach 2011, part of the workers’ money handled by NSSF shall be spent in the campaigns to retain the ruling party in government.

Vincent Nuwagaba is a human rights defender and a specialist on socio-economic rights.