The National Social Security Fund (NSSF) revenue increased by 15% from shs1.9 trillion to shs2.2 trillion for the financial year ended June 30, 2023, Managing Director Patrick Ayota has announced.
Addressing the media at the NSSF annual media roundtable, Ayota attributed the growth to increased earnings from interest income from shs1.79 trillion to shs 2 trillion and dividend income which grew from shs84 billion to shs139 billion.
On the other hand, income from the Fund’s real estate projects also slightly increased from shs13.4 billion to shs 14 billion and shs16 billion was earned from other income.
“Overall, the investment environment in Uganda and the region was challenging over the last financial year. However, the Fund was able to increase its revenue owing to strategic asset allocation that enabled us to remain profitable, despite a generally depressed market,” he said.
“Although inflation remained under control at 4.8%, the reduction in the value of the stock markets in Uganda and Kenya, the appreciation of the Uganda Shilling against the regional currencies, and the reduction in long-term bond yields increased pressure on the Fund’s performance. For us to post a 15% increase in revenue shows our resilience and an astute investment risk balance,” Ayota added.
Overall, the long-term bond yields dropped compared to the last financial year. For instance, on a year-on-year comparison as of June, 30 2023, the 10-year bond yield dropped from 15.600% to 14.788%, the 15-year bond yield dropped from 16.194% to 15.291% and the 20-year bond yield dropped from 17.6345% to 15.313%.
In addition, the stock markets in Uganda, Kenya, Tanzania, and Rwanda suffered a reduction in value.
The Uganda Securities Exchange Local Index reduced by 11.47% the Nairobi Stock Exchange All Share Index reduced by 14.04%, the Tanzania Stock Exchange Share Index reduced by 4.02%, and the Rwanda Stock Exchange reduced by 2.27%.
There was a significant appreciation of the Uganda Shilling against major currencies, mainly the Kenya Shilling which depreciated by 22.2% against the Uganda Shilling.
Ayota however said that the Fund’s financial position is stable and the Assets Under Management continue to grow.
“Our Assets Under Management (AUM) increased from shs 17.26 trillion in financial year 2021/22 to shs 18.56 trillion in Financial Year 2022/23. This growth was driven by an increase in member contributions, increased realized income, and a cost management strategy that enables us to create more value for the member at a lower cost compared to the previous financial year.”
“In fact, with the current asset base, we project that the strategic goal of growing the Assets Under Management to shs20 trillion by 2025 will be achieved by June 30, 2024, one year ahead of schedule,” Ayota added.
Information from the Fund shows that member contributions increased by 15% from shs 1.49 trillion in Financial Year 2021/22 to shs1.72 trillion in Financial Year 2022/23, while the cost of administration reduced from 1.18% to 1.02%.
Ayota assured NSSF members that the Fund is in a better financial position going forward and the focus has now shifted to ensuring its long-term sustainability.
“Our new “Vision 2035” is the bedrock of our long-term strategic focus– where we want to grow the Fund to UGX 50 trillion, cover at least 50% of the working population, and achieve 95% and both customer satisfaction and staff engagement,” he said.