The Ministry of Finance has announced that the National Social Security Fund (NSSF) savers will get 9.65% as interest for their savings which converts to Shs 1.38 trillion that will be deposited onto savers’ NSSF accounts.
The 9.65% is however lower than last financial year’s 12.15% which the minister attributes to financial shortcomings.
“In exercise of the powers conferred on me by section 35 of the NSSF Act, I have the pleasure to declare an interest rate of 9.65% to be paid as interest to the members of the fund for 2021/22,” Said Henry Musasizi, the State Minister for Finance.
NSSF Managing Director Richard Byarugaba asserted that the amount paid to savers in interest is determined by the net income and expenses.
“The amount of value we create through interest we pay is as a result of the expenses and the total income created. The less the expenses and the more income, the more the interest we pay out to members” said Byarugaba.
Byaruhanga further made note that the fund presently has 620,000 active members and 695,000 inactive members, bringing the total NSSF member count to 1.3 million.
Sighting reasons for the decline in the interest rates, Byarugaba noted that there was an increase in spending as a result of the Covid-19 pandemic that increased inflation.
“There was a higher than expected inflation worldwide but also the negative spillovers from the war in Ukraine had negative impacts on all economies. There was also a worse than anticipated slowdown in China(due to Covid) which has seen a slowdown in the supply chain. Generally, there was slowed global economic growth. This meant that what happens in the global economy affection the regional and local economy,” said Byarugaba
He also blamed NSSF’s slow growth on the global financial crisis caused by the pandemic and the Ukraine-Russia uprising.
“Last year was a tough year but one of opportunity. We tried everything that should and must work out in an environment that was tough. The fund came out shining as usual. The fund paid out shs1.9 trillion to members, this state of affairs globally meant that NSSF growth was slower on contributions whereas the fund’s real estate projects became more expensive”. said Byarugaba.
Byarugaba pledged NSSF’s committment to members for a better life sighting plans for a mass registration of membership, and continues use technology and financial literacy to members.
