Government seeks to formalise borrowing in NSSF Bill

The  Government yesterday said their quest to allow them to borrow directly from the National Social Security Fund (NSSF) in the NSSF amendment Bill is only aimed at formalising the process.

Mr Martin Wandera, the director of Labour, Employment and Occupational Safety and Health in the Ministry of Gender, said under the Uganda Retirement Benefits Regulatory Authority (URBRA) Act, NSSF cannot make direct borrowing to any person.

“It’s like saying I am going to marry my wife. We have been together for 15 years. We are now going to Namirembe church. Then at the wedding meeting, you ask; have you had problems with your wife? We are simply formalising what has been happening,” Mr Wandera said.

“For avoidance of doubt, a good law must create certainty. You must know what can be done under the law, what is permissible and not permissible. And that is what this law is doing. But again, we must stop treating our own government as some monster. All of you know that government borrows. It has not defaulted,” he added.

Mr Richard Byarugaba, the NSSF managing director, said their proposal to have government borrow directly from the Fund will not change anything since they have already been lending the latter through bonds.

On savings
He said the Bill seeks to expand saving so that when beneficiaries retire, they have more to withdraw as compared to what they get under the current law.
“At least 40 per cent of government borrowing is from NSSF. We are forced to save because money is hard to get. But when we need it most, usually it is not there,” Mr Byarugaba said.

“It reminds me about numerous letters I get everyday about people wanting their NSSF because they have had sickness of their dear ones, unemployment, their properties are going or have a death in a family or accident. Certainly these events turn up and we are totally unprepared,” he added.

According to NSSF statistics, 93 per cent of Ugandans saving with them retire with less than Shs50m on their account. There are almost 2.5m savers with NSSF. Of these, 1,500 members retire every month with an average payout of Shs15m.

Mr Byarugaba said it was unfortunate that half of those who save with them, consume their savings within their first year of retirement.
“Fifty per cent of all pensioners will have exhausted their savings within one year. When times are bad, we save more, when times are good we save less. Quite a paradox. We need to reverse this trend and have an increase within your pot to make sure there is sufficient contribution,” the NSSF boss said.

Credit-Daily Monitor

Leave a Reply

Your email address will not be published. Required fields are marked *