NSSF HAS COME A LONG WAY

It was around 1996 and I was a younger business reporter.

Then National Social Security Fund (NSSF) boss Abel Katembwe and architect Henry Sentoogo made us climb several flights of stairs to the seventh floor of a two tower shell  in the middle of Kampala.

The reason for this morning exertion was to explain to members of the board the options the NSSF had for the building.

"Believe it or not lifts were not planned in the original design of the 14-floor twin towers building. The options were to finish them as separate properties or have two walk ways at the seventh floor and the top, to join the two towers or make the massive outlay on a bank of lifts, which would fit nicely between the two towers.

It seemed obvious to me that Katembwe and Sentoogo had talked about it and they favoured the last option,  but new the cost would be a sticking point.

The rest as they say is history. So the next time you are in Workers' House and waiting for the lift, know that where the lifts are was open space and also explains the 14 floor atrium in the center of the building.

The Fund, which was barely 11 years old at the time must have had assets of less than a trillion and struggling to get employers to comply with their obligations to their workers.

Nearly three decades later and NSSF has become the biggest financial institution in the country and the biggest statutory social security fund in the region.

In between the Fund has battled perennial scandal that ensured a revolving door of CEOs, before settling down over the last decade or so to post its best performance ever.

Since the entrance of Richard Byarugaba in 2011 the Fund has grown from around sh2trillion to sh18.56trillion in assets under management. This is a 20 percent compounded annual growth over the period or it has been doubling in size every four years.

It helps that more and more people are contributing to the Fund. I could not get figures for 1996 but in 2011 the fund was collecting about Sh400b annually, which is what it now collects in about three months...

It did not happen by accident.  

Increased transparency, aggressive chasing of member contributions, better strategy and most importantly, execution of that strategy have been the key to turning around the institution.

The strategy that has been executed in the last ten years has its beginnings in the short lived tenure of David Jamwa, who run the Fund before Byarugaba.

I remember at the time seeing the new strategic objectives and worried that Jamwa was smoking very potent stuff.

It looks easy, collect money from members, invest the money, mostly in government paper and voila you have a profitable and rapidly growing company.

But there are a lot of moving parts that have to move well for this to happen consistently for a decade, despite some very drastic economic events -- covid lock down to mention but the major one.

It has been clear for a while now, that NSSF is an aberration in our economy, a public institution that works.

Its main strategic objectives until 2035 is that it will grow into a sh50trillion fund and that it will have half the workforce as members...

The growth to Sh50trillion is about 9 percent annual growth over the next 12 years, considerably slower than the last 12 years, but that maybe because we are working from a larger base now.

This means that the Fund's management has to be more disciplined in their execution of strategy and also keep costs to the bare minimum. They are already the most efficient Fund in the region, they must sustain that discipline or get better.

The culture of achievement has to go on. we members have been spoilt rotten, they have given us an inch we now want a mile.

In the mean time as this column has mentioned before, NSSF has become too big for this economy, that some of the people tasked with overseeing it can not wrap their heads around the numbers it deals in.

We saw it during the parliamentary probe. The honourable members -- who do not contribute to the Fund, could not understand how staff could share a bonus of Sh200b.

This is not new, about a decade ago a former chairman of the Fund exasperated by his inquisitors bellowed, "Watch me as I spend the money," in answer to a question about the huge sums NSSF would have to invest to make good on one real estate deal...

The way I see it two things have to happen. Either NSSF as part of its working commits to widely educating the public about how it does what it does or/and a law is past which shields it from the politics of the day.

It will still be supervised by the relevant ministries and audited by the Auditor General, but its day to day affairs will be beyond the prying eyes of parliament.

It happens already with the central bank and arms of government like the Judiciary and dare we say, parliament.

And finally going into the next stage of its development NSSF should not lose sight of the fact that, to those who much is given mush is expected.

Good governance is what has got us to this favourable point, a slip here will inevitably begin to show in the numbers and returns to members.