On Monday, 22 September, the National Social Security Fund will once again announce the interest rate on members’ savings at its annual members’ meeting.
The number will grab the headlines, as it always does, but the real story lies behind the figure—how the Fund has managed to keep growing, the pressures it faces, and whether it can keep faith with the millions of Ugandans who look to it for security in old age.
The growth has been undeniable. From the Sh1 trillion milestone it first crossed in 2011, the Fund has now raced toSh26 trillion in assets under management. That trajectory alone has changed the national financial landscape.
NSSF is no longer a quiet collector of payroll deductions; it is one of the largest investors in the region, a market mover in bonds, equities, and real estate. For members, that scale should be comforting—proof that their savings are being nurtured. But with size comes new questions about where the Fund is headed, and whether its growth is being matched by the prudence needed to safeguard it.
Much of the Fund’s success has come from its dominance of the domestic bond market. Month after month, NSSF steps into Bank of Uganda auctions and soaks up treasury bills and bonds, securing safe, predictable returns.
With yields hovering between 14 and 17 percent, members have enjoyed consistent double-digit interest rates, comfortably above the ten-year average inflation rate. The pledge to always deliver at least two percentage points above 10-year average inflation has been kept, and in a country where few investments beat inflation, that is no small feat.
The mid-term access provisions introduced in recent years have tested the Fund’s ability to balance inflows and outflows. Members over 45 with at least ten years of contributions have rushed to withdraw part of their savings. Benefit payouts have at times outstripped contributions, yet the Fund has kept its commitments without losing ground.
Liquidity has held, investment income has remained strong, and operational efficiency has improved. The turnaround time for processing benefits has been cut to under ten days, while administrative costs have been held below one percent of assets. Members can now track balances and file claims online, a far cry from the opacity of years gone by.
Beyond bonds, the Fund has tiptoed into equities and real estate. Holdings in MTN Uganda and Safaricom offer regional exposure, while projects like Lubowa and Temangalo signal ambition in bricks and mortar. Yet these ventures also raise uncomfortable questions. Housing units priced far above the reach of the average saver suggest a Fund that builds for others, not its own members. Equities provide diversification but remain a small sliver of the portfolio. In truth, the heavy lifting is still done by government debt.
And here lies the danger. Uganda’s domestic debt has ballooned past Sh56 trillion. NSSF is one of its largest creditors. That creates a concentration risk—too many eggs in one basket. A sovereign default is unlikely, but the pressure on government finances is real, and the Fund’s reliance on government paper ties its fortunes to the very borrower it cannot refuse. Members should be clear-eyed about this: the returns have been good, but they rest on an increasingly fragile fiscal foundation.
Governance is the other pressing concern. Over the last two years, the Fund has endured parliamentary probes, wrangles between ministries, and public controversy over management practices and bonuses. These are not trivial squabbles. They are reminders that the biggest risk to the Fund is not inflation or real estate volatility but weak stewardship. The mechanisms for collecting and investing savings are strong. What can undo NSSF is interference, capture, or short-term populism.
Looking ahead, the Fund stands at a crossroads. With Sh26 trillion in assets, it is one of East Africa’s largest pools of long-term capital. Managed wisely, it could finance infrastructure, energy, and regional ventures that transform the economy while earning robust returns for members. It could deepen voluntary savings products to reach the informal sector, giving millions outside formal employment a path to retirement security. It could realign its housing strategy to deliver genuinely affordable units rather than gated enclaves for the few. And it could hardwire transparency into its DNA so that members understand not just the size of their fund, but the risks and choices behind it.
The irony is that the most difficult part has already been done. The savings collection systems are in place, the investment frameworks are tested, and the habit of paying interest reliably has been entrenched.
The only thing that can fail now is governance. If the Fund falls to politics, insider capture, or weak accountability, then all those trillions will mean nothing. Growth without governance is a mirage.
So as members gather on Monday, they will no doubt cheer the double-digit interest rate that will be announced, if the performance of the Fund and past trends are to go by. But they must also look beyond the number.
The real question is whether NSSF can continue to grow with prudence, resist the pressures of its own success, and remain faithful to the simple promise that matters most: to protect and multiply the hard-earned savings of Ugandans. If it can do that, then the future of the Fund—and of its members—will remain secure.
