Kampala, Uganda | By Michael Wandati | A fierce debate over who’s who to supervise the Shs10 trillion National Social Security Fund (NSSF), Uganda’s largest pension fund has reignited.
In a letter dated January 8th, 2020 seen by the Kampala Dispatch, workers bodies; the National Organization of Trade Unions (NOTU) and Central Organization of Free Trade Unions – Uganda (COFTU) have petitioned President Yoweri Museveni requesting him to consider duo management of the NSSF by both the Ministry of Finance and Ministry of Gender Labour and Social Development.
The workers under their Trade Unions (NOTU and COFTU) have also petitioned the Speaker of Parliament Rt. Hon. Rebecca Kadaga over the same contentious issue.
Speaking to Kampala Dispatch, NOTU Chairman General, Mr. Usher Wilson Owere, insists that the Ministry of Finance is a regulator and cannot take over full control of the Fund, and therefore, the workers under NOTU and COFTU assert that this crucial fact and especially the proposal for duo management of the NSSF is brought to the attention of the President and Parliament — which was bench marked by Parliament of Uganda and is being practiced by Ghana, Kenya, Tanzania and among other countries and economies of the world.
Ministry of Finance wants full control of management of NSSF contrary to a Cabinet decision of placing it under duo management by the Ministry of Finance and that of Gender in the proposed National Social Security Fund Amendment Bill, 2019.
In July 2019, Cabinet chaired by President Museveni passed the principles to amend the NSSF Act of 1985, where the ministry of Gender would be in charge of social security policy and compliance of NSSF and the Ministry of Finance would be responsible for investment.
On October 4, 2019, President Yoweri Museveni wrote to the Speaker of Parliament Rebecca Kadaga objecting to a provision that the Ministry of Finance will oversee financial matters of the fund while the Ministry of Gender will handle policy issues. The President advised that the split oversight mandate would cause delays in decision making and create loopholes for corruption.
This guidance caused dismay among a number of MPs who insisted that the president had been misled and that he should be ignored. MPs Sam Lyomoki and Charles Bakabulindi insisted that it was improper to follow a directive from a letter that had not been laid in Parliament or referred to the committee by the speaker.
This he said would be highly irregular since the principle decision of Cabinet was to name the Gender ministry as the line ministry. He was supported by the Chairperson of the Gender committee Alex Ndeezi and Bugabula South MP Henry Kibalya.
Lyomoki says that the Ministry of Finance has an ulterior motive and agenda by plotting to hijack a mandate which is the labour ministry’s purview.
Mr. Owere asserts that if the Fund is managed by both Ministries of Finance and Gender, each ministry would handle their own components of the Fund (NSSF). “The Ministry of Finance can manage the finance and investment bit of the fund and while ministry Gender the social component,” he explains.
Mr. Owere warns that if Parliament passes the NSSF Amendment Bill, 2019, contrary to the guidance by the President and in protection of workers’ interests, then workers’ money would be at a risk.
“NSSF is such an important institution in the economy and once managed or supervised by two or three agencies will create a stalemate in decisions and, therefore, create supervisory loopholes,” State minister for Finance (General Duties) Gabriel Ajedra told a joint sitting of the Parliamentary Committees on Finance and Gender that splitting the oversight of the Fund would put savers’ monies at risk.
Presenting the Finance ministry’s views on the proposed NSSF Amendment Bill, 2019, he argued that his ministry is responsible for formulating financial policies in the economy and overseeing their implementation and should, therefore, supervise the Fund.
Mr Gabriel Ajedra, said NSSF shall continue to be managed by the Ministry of Finance despite demands from various workers’ organizations opposing the government position. Mr Ajedra said the President in his wisdom, guided that the Fund should remain under the Ministry of Finance.
In its current form, the Bill gives oversight to the two ministries, a position Gender minister Janat Mukwaya wants maintained. She proposes that Finance has responsibility for creating checks and balances in determining borrowing from the Fund and interest payable to savers, while Gender remains responsible for social protection policies.
Below is the NOTU/COFTU petition to President Yoweri Museveni:
The disagreement on which government ministry should supervise/manage the Fund comes at a time when NSSF is facing pressure to release the money to savers whose livelihoods were interrupted by the government measures to control the spread of coronavirus disease. These include employees whose employment was terminated as businesses closed with the lockdown.
The National Social Security Fund (NSSF) is the largest pension fund across the East African Community with assets worth over 10 trillion Shillings invested in Fixed Income, Equities and Real Estate assets in Uganda, Kenya, Tanzania and Rwanda.