Covid19 Impact: NSSF to Pay Single Digit Interest to Savers

The National Social Security Fund (NSSF) has announced it will be paying its members an interest rate that is lower that 10% this year, owing to the devastating impact that Covid19 has had on the economy.

The interest rate for this year will be officially announced by Finance Minister Matia Kasaija on Monday next week during the Fund’s Annual General meeting.

NSSF Managing Director Richard Byarugaba told press today that that interest rate for this year will be the lowest in 10 years.

“The economic downturn in Uganda as has been elsewhere has had a few impacts on our performance, and as such it is unlikely that we shall pay double digits the interest for this year,” he said.

“To put that in context, we last paid a single digit interest to savers in the year 2010/2011; so it appears that this this the 10-year cycle that we are coming back to.”

Byarugaba however, promised that the rate for this year will be competitive compared to other funds in the region.

Commenting on how the fund’s performance has been affected by the Covi19 over the last few months, Byarugaba revealed for the first time in over a decade, they the growth in contributions fall to 5.3%.

Byarugaba attributed this decline in contributions to the amnesty that was given to businesses and organizations that were affected by the Covid19 pandemic.


“In total we deferred up to Shs 22 billion per month for three months, which means that nearly Shs 70 billion wasn’t collected because of the pandemic,” he said.

It should be noted that in the previous year, NSSF’s contributions grew by 17%.

On the upside however, Byarugaba noted that savers did not rush make claims for their benefits as had been feared because of the pandemic.

This year, he said there was only a 10% growth in pay outs to the savers compared to last year’s 25% rise in claims.

“When the pandemic started, people didn’t rush to draw their savings despite the challenges. It seems that a lot of people were cautious.”

Meanwhile, the fund assets he said, grew by 17.2 from Shs 11.3 trillion last year to 13.38% trillion this year.

The total revenue grew from Shs 1.2 trillion to 1.47 trillion. This, the MD says was driven by interest income especially the and rental income from properties around the country.

On the other hand, the Fund’s cost of administration improved from 1.29 to 1.28 in the previous year.

“That means that members have incurred less costs which will go to their dividends,” Byarugaba said.

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