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Ugandans Reject NSSF 30% Deduction Proposal

Kenya President Uhuru Kenyatta has urged American businesses to ignore untruths about Africa and invest in the continent.

President Kenyatta said Africa is a place of diverse countries and peoples, thumb with considerable opportunities for trade and investment.

The President made the remarks in a video address to the Milken Institute Global Conference in Los Angeles in California, troche the United States on Wednesday.

A team of Kenyan Government officials and private sector representatives are at the conference.

“I invite you to engage them, and see how we can work together. This conference is a superb opportunity to replace the older, darker view with a more accurate picture on Africa,” the President said.

The President said the country has made substantial investments in infrastructure – the Mombasa port is being expanded, a new standard-gauge railway running from Mombasa to Uganda is being built and a new port in Lamu is under construction.

“We are the gateway to Africa; its ninth-largest economy; and the heart of a community of 150 million people. We aim to make the most of these advantages,” President Kenyatta said.

He said Kenya is keen to form partnerships in ICT, agriculture, energy, financial services and manufacturing.


The President pointed out that though the country has the best Internet connectivity in Africa, more could be done from the experience of others.

“There is potential for partnerships in energy, especially because Kenya has perhaps half of Africa’s potential geothermal power,” President Kenyatta also said.

He described Africa as the second-fastest growing continent as demographics and technological shifts have clearly shown.

Saying young people and cities often drive innovation and growth, President Kenyatta disclosed that Africa will soon have about one billion young Africans of working age and over 100 cities of at least a million people each.

The President said Africa has adopted technology that has eased old challenges, adding: “There are as many as one and a half times as many mobile-phone users in Africa as in the US.”

With Africa’s economic management better and political and economic risk ratings in line with the BRICs, President Kenyatta said the importance of economic and political stability cannot be under-rated.

President Kagame at the Milken Institute Global Conference held in Los Angeles on Monday
President Kagame (C) at the Milken Institute Global Conference held in Los Angeles on Monday

He said reforms in various countries in the continent have revived African solidarity.

“We have renewed our conviction that if we stand together, we can solve our problems and earn the prosperity and freedom that we deserve,” he said.

The President, who has been at the forefront in regional integration, said the continent with support of friends and partners and has the second-best rate of return in the world.

The conference brings together distinguished leaders and entrepreneurs. President Paul Kagame of Rwanda is among key speakers.

Kagame speaks out

Addressing leaders from a variety of sectors including infrastructure, renewable energy, finance and ICT, President Kagame highlighted the role of business in creating prosperity:

“The urgency to act is not only about businesses having returns. It is about what businesses leave behind and how many lives are transformed. The more lives are transformed, the better it is for business.”

President Kagame added that although perceived risks far outnumber real risks when it comes to investing Africa, it is the responsibility of government to reduce risks to a minimal level and decrease the cost of doing business.

Sharing the example of the one area network that reduced roaming fees between Kenya, Uganda and Rwanda’s mobile operators and led to a 300% increase in subscribers, President Kagame emphasized the role of political will in implementing policies that can benefit both citizens and the private sector.
Ugandans have opposed the National Social Security Fund (NSSF) Managing Director, try Richard Byarugaba’s proposal to increase workers’ monthly deductions from 15 to a staggering 30 percent, a a snap online survey has revealed.

Byarugaba told the third Congress of Central Organisation of Free Trade Unions (COFTU) in Mukono District on Monday that the increase in the deductions would enable the fund provide more attractive social products.

“We conducted a research and found that about 72 per cent of workers, after picking their retirement benefits, become destitute after two years. They spend the money on themselves and remain with nothing. We are now saying, workers contributions should be increased from 15 per cent to 20 or 30 per cent so that we can provide more products such as medical, housing, education, among others,” Byarugaba was quoted as saying.

However, Ugandans took to social media on Wednesday to express their frustrations with the fund.

Several people said even with 15 percent of workers’ contributions, NSSF should be able to provide medical and housing facilities.

For some time, Ugandans have argued that NSSF should allow customers secure a portion of their savings for medical insurance and housing.

James Oyena observed: “I am also of the view even with the current 15 percent standard contribution, NSSF can introduce reforms in the benefits scheme.”

According to Byarugaba, “The employee will contribute 10 per cent and employer 20 per cent.”

But a strain on employers would see workers laid off to minimise costs thus increasing unemployment levels in the country.

The better part of Uganda’s tax collections comes from the private sector which contributes 10 percent to the employee’s savings of 5 percent.

Oyena argued that “the workers of this fair land need to get organized and stop agonizing. Without a credible forum to counteract and debate ably the proposed policy changes, we should be prepared to swallow humble pie and meekly comply.”

Robinson Isaac Ogwang said the greatest mistake with NSSF Corporate Governance composition is that worker’s representatives on the board are not workers.

“Decisions are always made without consultation of the core stakeholders,” he added.

“Nevertheless, if the proposal to increase the standard contribution is adopted and we are assured of improved oversight and general performance of the fund, I would not mind my employer paying in an extra 10 percent to my own additional 5 percent. After all if I asked for a salary increment I am sure I won’t get in a long time.”


In response to the Chimp Quiz on Wednesday, Samuel Muchope said on Twitter: “No. I think NSSF MD is unserious. Uganda has no minimum wage, Shs 165bn pension money was swindled and not Shs50 has been recovered.”

Harriet Anena shared on Facebook: “A 30 percent deduction plus all the taxes we pay, government may as well just give our employers an account to deposit all our salaries there. It just doesn’t make sense!”

Obote Ojok chipped in: “I am not so conversant with the investments of the fund but what worries me is that too much is going into real estate. I know it’s looking at improving housing while it makes a profit but what happens when the bubble bursts? Also wonder how much is invested outside the country in more stable ventures? Can’t the fund also invest in health care hence having healthier people to pay more?”

Barbara Among, an investigative journalist in Uganda had no kind words for Byarugaba: “I think NSSF MD proposal to increase the deductions from 15 percent to 30 percent is ridiculous and not a solution to poor management or a lack of strategic thinking at the Fund.”

The prominent journalist added: “Just by having an arrangement where a worker can borrow against his/her savings (of 15 percent) a month like corporate Savings Coops do, can help a worker acquire a house or buy medical insurance.”

She described the move as “robbery.”

Among queried: “As a worker, I want you to first give me a breakdown of what 30 percent can do that the 15 percent has failed to do. Why can’t NSSF first implement that proposal with the current 15 percent?”

Shawn Mubiru, a political activist, weighed in: “It is absolute disrespect when NSSF asks for more when they have failed to manage the 15 percent now why do they think that I have to save with them alone? That now they want 30 percent contribution from my earnings.”

The Fund has in recent years grappled with allegations of corruption and abuse of office.

Joshua Mmali also opposed Byarugaba’s idea: “I wonder how much I have now accumulated for my 3 years of contributing to that ridiculous fund. 10 years ago (luckily, I only contributed to it for 3 years! I feel for you guys who have given them so many years of your hard-earned money!). Anyway, I wish they could just give me my money now and I spend it all on whatever I please!”

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