Contributors to the National Social Security Fund (NSSF) in Uganda will receive an 11.5 percent interest rate on their savings this year, Finance Minister Matia Kasaija announced on Thursday.
This marks a significant achievement for the Fund, offering the highest return since Mr. Kasaija took over as Finance Minister.
“This is the highest interest I have declared ever since I became Minister of Finance,” Mr. Kasaija said during the declaration. The announcement is seen as a major boost for Uganda’s workers, whose savings are managed by the NSSF, as the interest rate surpasses last year’s 9.65 percent.
Patrick Ayota, the Fund’s Managing Director, revealed that the NSSF had reached its ambitious target of Shs20 trillion by June 2025 ahead of schedule, achieving this milestone earlier this year, about 18 months ahead of time.
“The NSSF had set the Shs20 trillion target as part of its long-term growth plans. Surpassing this goal earlier than expected has been attributed to prudent management and strategic decision-making that has seen the Fund grow exponentially,” Ayota said.
High Returns
Mr. Ayota emphasized the solid financial footing of the Fund, highlighting its capacity to generate strong returns for contributors.
“Last year, we collected Shs1.9 trillion on your behalf and generated interest that was credited to your accounts. For every shilling spent on expenses, we created a value of 18 shillings,” Ayota noted.
This is a significant achievement compared to neighboring countries, where Kenya’s NSSF generated 8 shillings and Tanzania’s Fund 5 shillings for every shilling spent.
The NSSF’s performance reflects the efficiency and effectiveness of its operations, allowing Ugandan savers to enjoy higher returns on their contributions compared to regional counterparts.
Implication for Savers
For the over 1.5 million active NSSF contributors, the 11.5 percent interest will be a welcome addition to their savings. The interest, which is calculated based on the average balance in a contributor’s account over the year, is credited directly to individual accounts, boosting their total retirement savings.
This year’s rate surpasses last year’s return, signaling improved performance. The NSSF, which is mandated to manage workers’ retirement savings, has been under pressure in recent years to ensure higher returns while minimizing administrative costs. Its ability to offer an 11.5 percent interest rate demonstrates strong investment strategies, with much of the Fund’s assets being invested in government securities, equities, and real estate.
Regional Picture
The success of Uganda’s NSSF is notable when compared to similar funds in the East African region. Kenya and Tanzania have struggled to achieve such high returns on their contributors’ savings. While NSSF Uganda has implemented policies aimed at maximizing contributors’ earnings, neighboring countries have been hampered by higher administrative costs and lower returns on investments.
