According to the Daily Monitor, Mr Matia Kasaija said the rate has been declared over and above the 10-year average rate of inflation now at 6.71 per cent, which means that the members still earned full on their savings with the NSSF. This was during the Fund’s 7th Annual Members Meeting at Kampala Serena Hotel.
The interest declared is lower than last year’s 15 per cent interest due to a decline in regional equity prices and strengthening of the Uganda shilling, which affected the valuation of the Fund’s holdings in all foreign currency balances and equity valuations, thus impacting the Fund’s overall income.
“The stock exchanges in East Africa, and generally in the whole of Africa suffered a significant reduction in the value of the listed entities, affecting entities like the Fund that invests regionally,” Mr Kasaija said.
The declared interest rate of 11 per cent translates into Shs978 billion and will be calculated and credited on the balance outstanding on the members’ accounts as at 1st July 2018, in accordance with provisions of the NSSF Act.
“Although lower than what I declared last year, the rate I have declared today is still very competitive and is higher than 6.7per cent – the 10-year average rate of inflation, the Fund’s benchmark. It is also higher than annual inflation of 3.4 per cent recorded last Financial Year, 2018/19,” he said.
Mr Kasaija added: “Most importantly, the Fund has paid its members a real return, thus eliminating the risk of erosion of the value of their saving as a result of inflation. The savers’ money is being in real terms which is the fundamental matter for long term savers.”
The NSSF Managing Director, Mr Richard Byarugaba said that in spite of the difficult investment environment, the Fund performed over and above most performance targets.
“Overall, we created value for our members. In fiscal year 2012/2013, we committed to pay members a real return – at least 2 per cent above the 10-year inflation. We have consistently delivered on this promise and have done so again this year,” he said.
The NSSF Board Chairman, Patrick Byabakama reassured members that the Fund was on a growth trajectory, having grown its assets under management by 13.6 per cent from UGX9.9Trillion in the previous financial year to Shs11.3 trillion in 2018/2019.
Mr Byabakama explained that the Fund’s focus going forward will be to conclude the Real Estate projects as well as innovations to be responsive to needs of the members that will be occasioned by the proposed NSSF Amendment Bill.