NSSF ANNOUNCES 11PCT INTEREST ON MEMBER SAVINGS

KAMPALA – Uganda’s National Social Security Fund (NSSF) on Friday announced that it would pay out an 11 percent interest on members savings, down from last year’s 15 percent but above their commitment to pay more than the average inflation rate of the last 10 years.

In 2014/15 NSSF pledged to pay two percentage point s or above the 10-year average inflation rate. The average inflation rate for the last 10 years is 6.7 percent.

This is the lowest interest payment by the Fund since the 10 percent given to members in 2012.

The lower rate came as a result of unrealized losses on their equity holdings during the year exchange losses on their investments abroad.

The local and regional stock exchanges on which the Fund is heavily invested showed double digit losses in their performance last year. The Uganda Securities Exchange shed 10 percent of its value, the Nairobi Securities exchange 14 percent and the Dar es Salaam Stock Exchange 21 percent. NSSF reported a sh168.9b unrealized loss from its equity holdings.

NSSF’s regional and international portfolio also suffered a sh247b foreign exchange loss as the Uganda shilling uncharacteristically strengthen against the US dollar and regional currencies.

These two losing items accounted for the entire sh404.9b loss that the Fund announced for the year. Last year NSSF reported a sh240.4b surplus.

As a result, NSSF paid out sh978b or 11 percent less in interest to its members than last year’s 1,100b.

The loss came despite a 21 percent jump in total revenues to sh1,255b from sh1,042b.

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