Minister Declines to Respond to NSSF Corruption Allegations

The Minister of Gender, Labour, and Social Development, Betty Amongi has declined to respond to any corruption allegations that she made against the management of the National Social Security Fund (NSSF).

Amongi was appearing before the Finance Committee of parliament on Tuesday alongside the Minister of State for Finance Henry Musasizi and the NSSF Deputy Managing Director, Patrick Ayota to make a presentation on the performance of the fund and its future.

During the meeting, the Shadow Finance Minister, Muhammad Muwanga Kivumbi raised a procedural matter demanding that the officials respond to several issues in the public domain pertaining to the alleged mismanagement of the fund and corruption.  

The Butambala County MP cited a letter authored by Amongi on December 7th, 2022 detailing gross corruption in NSSF, declining membership, and incompetence among others. Kivumbi appealed to the committee Chairperson, Keffa Kiwunuka to allow members to go through the Minister’s letter in comparison with the ‘rosy’ presentation made by the Acting Managing Director Ayota.

In his presentation, Ayota said that the current NSSF membership stands at 1.3 million with a historical annual growth of 140,000 members. The Fund portfolio stands at 17.9 trillion Shillings. He said 78 percent of this is fixed income assets, 15 percent equity instruments, and 7 percent real estate.

According to the statement the portfolio of the fund in the financial year 2019/2020 stood at Shillings 13.2 trillion, Shillings 15.5 trillion in 2020/2021, and grew to Shillings  17.2 trillion in the 2021/2022 financial year.

“The assets have had steady growth from the financial year 2017/2018 at Shillings 9.9 trillion to Shillings 17.8 trillion in the financial year 2022/2023. The growth is due to contributions and income growth,” said Ayota, adding that in 2035, they envisage the Fund to cover 50 percent of the working population and to grow to Shillings 50 trillion.

However, Kivumbi said that the committee also needed to listen to the not-so-good story at NSSF that has been penned down by the Minister. “He has given us facts that do not speak truth to the situation pertaining to NSSF. I have a copy of the Minister’s letter with me and if you permit me, I can go through these facts one by one and they can either dispute or say they are not right. This is a letter written by the Minister and I lay this letter on the table,” said MP Kivumbi.

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In the letter seen by Uganda Radio Network, Amongi wrote to the NSSF Chairperson Board of Directors deferring the re-appointment of the NSSF Managing Director, Richard Byarugaba pending clarification on what she described as emerging issues.

She also claimed that a thorough examination of the Fund's performance shows a decline over the last four years. She highlighted a declining trend from 32 percent in 2010 to 11 percent in June 2022.

“My focus is a deeper analysis of actions of the management represented by the MD, which attempts to answer the question: Could the Fund have performed better if the MD had made different strategic decisions? This is critical because, over the next decade, the role of the Fund in the economic development of Uganda requires a different mindset change and different strategic direction. Can you clarify why the number of contributors has remained stagnant at 630,000 active members with about 690,000 dormant members? Why is the MD not embracing initiatives to scale up registration of more members?” Amongi wrote.

The letter also highlights allegations of financial impropriety in the Pension Tower project, collusion with the contractor, and kickbacks in the purchase of the MTN and Quality Chemicals shares by NSSF. 

In her response to Kivumbi, the minister said that she didnt know the source of the letter and that she had been invited before the committee to respond to micro-economic issues like the trend in the growth of the fund's membership, the Fund asset base, investment portfolio and impact of amendments to the NSSF Act.

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Keffa Kiwanuka, the committee chairperson ruled that the letter had just been brought to his attention and that it would require them to first verify its authenticity and discuss the details internally. 

Kiwanuka also noted that there is split oversight responsibility over NSSF and that it would be necessary for the committee to first determine whether issues raised in the letter are of a financial nature or if they fall under the Gender committee of parliament.

However, Kivumbi insisted that the letter raises issues on investment and other financial issues. Kiwanuka maintained his ruling that the letter will be considered internally and if necessary, the committee will invite the Minister again.

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Kivumbi protested the ruling by the committee chairperson and walked out of the meeting. “Now that you ruled that we proceed on the basis of failure to discuss in full honesty, in my humble capacity, I have no business in engaging in a discussion that is not based on truth. I beg with due respect to leave this meeting in protest,” said Kivumbi before walking out of the meeting room.

In an interview with journalists, Kivumbi said that he was going to formally write to the committee regarding corruption allegations at NSSF and cause an investigation into the matter. Back in the committee meeting, Elijah Okupa the Kasilo County MP warned the Acting NSSF Managing Director, Patrick Ayota to sort out matters raised in the Minister’s letter and to avoid walking out of the Fund through Luzira Prison.

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Henry Musasizi, the State Minister for Finance told the committee that the members’ savings in NSSF are safe and that internal controls are very robust.