Finance minister to announce NSSF interest rate next week

September 22, 2017 in Business, Companies, Financial Services, Investment, Policy by Editor

September 22— Current members of the UGX6.6 trillion (close to $2 billion) National Social Security Fund (NSSF) will hear how much interest is payable on their contributions next week.

Kasaija’s Ministry oversees NSSF operations and last year announced a rate of 12.3%.

The AGM is scheduled for September 28 and traditionally this is around the same interlude when the finance minister, in this case Matia Kasaija, will announce the latest rate. It was 12.3% for financial year 2015-16.

Richard Byarugaba, the NSSF managing director said in June, “The declaration by the Minister will happen possibly in September this year and will depend on how well the Fund has performed.

“However, I can confirm is that the rate will not be less than the 10 year average rate of inflation plus 2 percentage points, which is in line with our commitment to pay our members a real return,” he said.

Sources told 256BN bearing in mind the tough economic conditions of 2016, members should not expect a substantial increase. One of the NSSF’s most important investments, Umeme, the electricity distributor, reported a reduction in profit after tax of $31 million compared to $34 million the previous year. However other investments, like Uganda Clays have done better than expected while Kenya’s Safaricom continues to be the most profitable company in East Africa.

NSSF falls under the overview of the Ministry of Finance and Economic Development. By mid-2017, total contributions had topped UGX100 billion (about $30 million) for the single month of June.

Under the provisions of the 1985 Act, the employer must deduct 5% from the employees total gross monthly wage and add 10% of the total gross monthly wage making a total contribution of 15% for each employee. As a provident fund, NSSF pays out contributions in a lump sum.