By law every Ugandan worker who is employed outside the civil service is supposed to save 15 percent of his or her monthly salary with the National Social Security Fund (NSSF) with a view of getting a good retirement package to be able to survive the challenges of old age.
There are over one million Ugandans who are saving with the NSSF, an entity that has gone through a series of challenges since its inception in the 1960s. It has been soaked in scandals which end up leading to firing and prosecution of key players.
At the moment, the country is reading through a detailed report of the select committee of Parliament that has been probing into the operations of the Shs17 trillion fund after there were reports of mismanagement.
When Speaker Anita Among instituted a select committee led by Mbarara City South legislator Mwine Mpaka, the media was awash with reports that Gender, Labour and Social Development Minister, Betty Amongi had allegedly stolen Shs6b from the Fund that she supervises.
According to the amended NSSF Act, the fund is under dual supervision as the Ministry of Gender is responsible for social security while the Ministry of Finance is in charge of the investment arm.
Parliament had also heard that there were issues of mismanagement which had led to the Labour Minister’s decision in December last year not to re-appoint on contract Managing Director, Richard Byarugaba. He had clocked the 60-year mandatory retirement age but President Yoweri Museveni and Prime Minister Robinah Nabbanja had given a greenlight for his re-appointment together with deputy Managing Director, Patrick Ayota who is two years older.
Ayota who was handed a one-year contract is now the Acting Managing Director after Byarugaba’s re-appointment was blocked by Minister Amongi citing a lot of issues surrounding his style of management at the Fund.
On Wednesday, Mpaka’s select committee presented its report to Parliament which is carrying 27 recommendations after unearthing rot in the NSSF, something that leaves the workers/savers in a state of anxiety.
In the report that will be debated ahead of possible adoption by Parliament on March 7, 2023, the legislators want a complete overhaul of the top management and the board of directors of NSSF in order to safeguard the saver’s money. Minister Amongi is also not spared as the committee recommended that she resign in public interest because of alleged fraud in the quest for Shs6b off the Fund to be allocated to her ministry.
“The actions of the Minister are arbitrary and an abuse of the duty under the NSSF Act thereby bringing her conduct within the ambit of the prohibitions under Section 11 of the Anti-Corruption Act on abuse of office. The committee therefore, recommends that the Minister of Gender, Labour and Social Development, Betty Amongi Ongom, resigns in public interest with immediate effect. We further recommend that the President should take interest in the Minister’s actions” reads part of the report.
In January, the Minister conceded in a statement to Parliament before the probe was ordered that she had before approving the NSSF Budget asked for the Shs6b to be included but was to be spent by the Fund itself to mobilise for more savers in the increasingly booming private sector.
When the supervisor is gone by resigning, the legislators want the top brass at NSSF fired with several of them supposed to face further investigations and possible prosecution for their alleged involvement in irregularities at the Fund.
The Board of Directors led by Peter Kimbowa is at fault for failing to steer the NSSF to meeting the interests of the savers and has been accused of sleeping on the job while the top management has been plundering the Fund.
“The Committee notes that the Board has failed on several occasions as seen in the report to ensure that there is secure, profitable and effective financial management of the fund for the benefit of the workers in particular and the country at large as stipulated in Section 4 of the NSSF Act. The committee therefore recommends that the 12th NSSF Board be dissolved by the Minister with immediate effect” it is recommended.
According to the report before Parliament, Board members have been involved in fighting and also connived with top managers to engage in cash bonanza which is putting the savers’ money at risk.
It was found out that board members who are not full- time employees of NSSF have been receiving NSSF remittances. Board members are supposed to receive a monthly retainer and by law are not entitled to NSSF remittances. The NSSF Act provides that an employer contributes 10 percent while the employee is docked 5 percent of the monthly salary in NSSF remittances.
It was found that the board expenses grew by 90 percent while expenses for the Directors also grew by 51 percent in 2021 and 2022 something that puts the savers money at risk of not accumulating good interest. A case in point is the expenses of Shs200m on the training of four board members representing the workers. The audit training was held in Arusha, Tanzania.
Another cash bonanza involving the board members is the inclusion of Shs1.8b in the budget supposedly for Corporate Social Responsibility and Investment in the current financial year. The Minister for Labour was allocated Shs250m, the Board Chairperson got Shs250m, the rest of the board members got Shs500m while two trade unions had a share of Shs800m.
To the Select Committee, this expenditure meant for donations was irregular because it was not aimed at growing the Fund but disadvantaged the savers’ who are supposed to see their accrued benefits increase through returns from investments.
Parliament also wants the top managers led by Byarugaba to be investigated by the Inspector General of Government (IGG) with immediate effect with hope that they are finally prosecuted for their wrong deeds at the Fund.
After probing this budgetary allocation, the Committee observed that Byarugaba worked alongside his then Deputy MD, Patrick Ayota, Chief Finance Office, Stevens Mwanje and Head of Marketing and Corporate Affairs, Barbara Arimi Teddy.
Parliament is expected to adopt a recommendation that these officials should step aside with immediate effect to pave the way for a thorough investigation by the Inspectorate of Government (IGG) for offense of abuse of office, corruption and conspiracy to commit a felony.
With many things found to have gone amiss in the operations of the NSSF, Parliament has also ordered for a lifestyle audit on Byarugaba, Ayota, Arimi, Mwanje and six others. The other officials set for lifestyle audit within 60 days of adoption of the report are; Chief Investment Officer, Gerald Paul Kasaato, Chief Commercial Officer, Geoffrey Sajjabi, Technology and Enterprise Solutions Officer, Benon Katende, Chief People and Culture Officer, Milton Owor, Chief Risk Officer, Edward Senyonjo, Head of Internal Audit, Geoffrey Barigye, and, head of procurement, Gerald Mugabi.
Parliament having been told that many things are not being done properly at the NSSF, the IGG will have to carry out further investigations on several individuals. Warranting an IGG probe is a list of 13 people who participated in the smart cade project and customer self-touch pad that caused the Fund a financial loss of Shs2.6b and Shs133.2m respectively. Those implicated in this include, Workers MP Agnes Kunihira who was a board member at the time of the loss, Board Finance Committee members-Sarah Walusimbi and Richard Bigirwa. Others are; Stevens Mwanje the Head of Sales and Operations at the time, Head of Information Technology, Collins Babirukamu, Acting Head of Marketing and Corporate Affairs, Edgar Birungi and Customer Care Manager, Moses Emodu.
Others are; Functional Specialist, Pauline Nagadye, Head of Procurement and Disposal Unit, Gerald Mugabi, Legal Counsel, Joseph Kalinaki, Network Administrator, Simon Kule, Contributions Supervisor, Daniel Batekereza, and, then Deputy MD, Geraldine Ssali Busuulwa.
Responding to the report, Byarugaba told the Daily Monitor newspaper that there is no need for the Parliamentary committee to ask him to step aside because he is already out of NSSF at retirement.
“The report is not saying anything new because everything is being investigated by the Inspector General of Government (IGG). I am not working at NSSF; so, how can I step aside?” he is quoted to have asked.
One of Byarugaba’s indictments in the report is the issues of the Shs11b NSSF advanced to Uganda Clays, something that was found irregular since the Fund is not a bank that can lend to private entities. NSSF loaned Shs11b to Uganda Clays but the money has raised up to Shs24b with the debtor only serving Shs221m.
“They are still wild [allegations] because when the IGG investigates they will find out I did not [for instance] make the loan for Uganda Clays,” Mr Byarugaba said.
The IGG, Beti Olive Kamya, is already investigating alleged abuse of office in the NSSF while Parliament is also calling for a number of forensic audits into the books of accounts by the Auditor General.
