20% withdraw could make Nssf an ATM machine


By Kagenyi Lukka

The lockdown that has been imposed on us by the government to avert the likely dangers of COVID-19, an a severe respiratory syndrome caused by the novel corona virus has got many people thinking about and planning to make various some of which could be disastrous.

This situation has dragged the National Social Security Fund (NSSF) into the discussion with a seemingly incited group of savers clamouring for partial withdrawal of their savings to a tune of 20%.

This bandwagon has been unreasonably embraced by a section of politicians including members of parliament, civil society and religious leaders to mention but a few.

Victoria University

They argue that granting this access will be a relief to members that have been crunched by the lock down.

First, NSSF fully understands the sentiments from its members and the public according to my keen observation.

That’s why the fund made a contribution to the national COVID taskforce to a tune of over Ugx.300 million.

*To pay or not pay 20% to savers*

With over Ugx.12 trillion, NSSF remains the largest social security fund in East Africa.

Are these monies kept in the basement of workers house?

The automatic answer is no. The money has been invested in long term businesses accross the region ie in real estate, treasury bills and bonds, companies such as safaricom etc and as such, calls for withdrawal should take this aspect into consideration.

Does the law allow withdraw of 20%?

The 1985 NSSF act doesn’t envisage a pandemic situation as a circumstance under which a member can be paid.

The framers of the Act provided for access of saved money at 55 years ie the funds were deemed to cater for life after retirement. I will not discuss other situations today.

Therefore even the fund’s MD, Mr Richard Byarugaba wanted to give out money, the law doesn’t allow and a Luzira bound bus would await him if he did.

Should parliament amend the Act to allow payment of 20% to savers?

A section of MPs have indicated that they will propose and support this disastrous amendment

This proposal will only make NSSF a commercial bank with Automatic Teller Machines where savers can withdrwal as and when they wish.

Let’s recall that employees only contribute 5% of their monthly salary. We would pause and ask, where does 95% go?

Why haven’t savers used the 95% to cushion them against shocks of COVID-19?

This is a matter of poor saving culture and  this populist attempt to open up of the granary will enable many of the savers to eat even the seed which had been reserved for the next planting season.

The able-bodied young Ugandan savers praising this folly will remember me while gnashing their teeth as 55-year old beggars.

The writer is the Business Development Manager of edge.ug/  parliamentary hopeful for Ikiiki county Budaka District.



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