Due to the economic constraints that have come up as a result of the outbreak of the coronavirus in Uganda, a section of Ugandans that have been saving with the National Social Security Fund (NSSF) were looking to the Fund for a partial payout from their savings to be able to go through the social threats that have come with the economic hardships.
Dr. Kizza Besigye, a prominent opposition leader and the former president of the Federal for Democratic Change (FDC) in a social media statement had appealed to NSSF to make it possible for members to receive a portion of their savings to go through the social crisis that came with the pandemic.
“This is members’ money; it is not charity; they can pay 10-20% of a members savings. If there is any legal impediment for them to do so, Parliament can sit tomorrow and sort it out. This is a world crisis of unprecedented proportions,” Besigye stated.
However, in a statement issued yesterday, Richard Byaruhanga, the Managing Director NSSF ruled out any possibility of a partial pay out saying that although the fund empathized with its members for the uncertainty resulting from Covid-19 and understood the request for partial payments, the fund did not have a legal framework for it but also because the fund didn’t have enough liquidity to pay.
According to him, 80% of the funds assets are invested in government treasury bonds meaning that government would have to buy back its bonds for NSSF to raise enough liquidity to pay all its 1.9m workers a portion of their money.
“That would leave government short of locally mobilized funds for its social and economic interventions which may have more drastic effects in the economy in the coming years. We are confident that government is putting in place measures to address the economic impact,” he stated.
He further noted that paying its members alone would not solve the negative social impact and would be discriminatory as there are other 19m Ugandan workers who do not save with the Fund that would not have any bailout.
“But also, the social fund was created to provide a safety net for members in case of old age, permanent incapacitation or for dependents in the event that the member dies. The current epidemic does not meet any of the above criteria,” he stated.
Due to restrictions that were announced by the President of Uganda to curb the spread of the virus like closing down any social gatherings like bars, churches, weddings, and closing down borders, a lot of Ugandans are already feeling the pinch as most of them have already been asked by their employees to stay home as business slows down.
According to the Finance Ministry, over 170,000 are expected to slip into poverty due to the effects of the epidemic.
To make matters worse, the prices of essential goods like food stuffs have also been hiked making it impossible for the people that are already not working to feed their families.