On June 16, 2022, Gender and Labour Minister Hon Betty Amongi wrote to Dr Peter Kimbowa approving National Social Security Fund (NSSF) budget for financial year 2022/2023.
Dr Kimbowa is the chairman board of directors of NSSF.
The Minister made several recommendations and observations.
In her decision, she cancelled the proposal to purchase land for real estate at shs 400 billion suggesting that she would first conduct due diligence.
“Under Real Estate component, the implementation of strategic land purchase totaling 400,000,000,000 should be differed at the moment pending a due diligence report,” part of the letter reads.
In the letter, Hon Amongi justifies payment of shs 6 billion to herself while advancing ambiguous reasons.
Most of the areas she raises which would be funded by the 6 billion already exited and had been funded.
It is alleged that when Richard Barugaba, who was CEO refused to clear the 6 billion saying there is no way he could account for the funds, the minister retaliated by denying him contract extension even when the President guided otherwise.
The Inspectorate of Government at the beginning of this month froze the accounts of NSSF on learning that the acting CEO Patrick Ayota, a close ally of the Minister had included the 6 billion in the new budget.
The IGG, Betty Kamya has since commenced investigations into the matter.
Below is Minister Amongi’s letter to Dr Kimbowa.
APPROVAL OF NATIONAL SOCIAL SECURITY FUND BUDGET FOR THE FINANCIAL YEAR 2022/23
Allow me to extend my compliments to you and the management team for the tremendous work you are doing to make The Fund remain on a steady positive growth trajectory.
In lieu, I make reference to your letter dated 10th June, 2022 and the meeting held at the Ministry of Gender, Labour and Social Development office on Monday 13th June, 2022 with management to clarify some of the budget estimates I had earlier inquired about.
From our engagement and the projections you had earlier provided in the FY 2022/23 budget document, I observed the progress made by The Fund towards achieving the 2025 strategic Plan.
The Fund projects to grow the asset size by 9.2% to UGX 17 trillion by 30th June 2022, and to grow capital investments from UGX 15.56 trillion, and to grow capital investments by UGX 1,446 trillion.
This is despite the introduction of the mid-term access which has depressed returns and increased cash outflow from The Fund. Customer satisfaction is projected to close at 86% against the target of 85% by June 2022. I applaud you for this progress.
Following the enactment of the NSSF Amendment Act, Board and Management should take full advantage of the
opportunities presented by the amendments to grow The Fund.
Special attention should be in areas of strengthening compliance with labour laws, sensitization and engagement of employers and workers to scale up the expansion of social security, and engagements of Parliamentarians and other strategic stakeholders.
I have reviewed the details of the budget proposals for FY 2022/2023, and therefore, guide as follows;
- a) Under Real Estate component, the implementation of strategic land purchase totaling 400,000,000,000 should be differed at the moment pending a due diligence report.
These funds will be provided as a supplementary during the implementation of the budget for the FY 2022/2023. To this end, the approved budget under this budget category would amount to Shs. 543,532,982,127 (Five Hundred and Forty-Three Billion, Five Hundred and Thirty-Two Million, Nine Hundred and Eighty-Two Thousand, One Hundred Twenty Seven shillings only).
Approval of expenditure of Yusuf Lute Road, under Real Estate listed as No.15 & 16 has also been deferred pending resolution of the issues raised in the petition to the Board chairman. I shall authorize its spending after resolution of the issues.
I shall however, provide it’s figures in the total appropriation in the budget with the hope that the issues shall be resolved on the basis of consensus and within the PPDA legal framework.
On the account of the projected satisfactory performance for FY 2021/22 (June 2022) and The Fund’s planned activities for Pt 2022/2023, I hereby approve the budget as below.
Budget Category Budgeted costs (UGX)
Operating Budget 220,885,834,375
Capita I Budget 1,646,760,515,312
Fixed Income 400,000,000,000
Total Budget 2,267,646,359,687
N.B. From our discussion, the UGX 400 billion is being reallocated from the capital investment in Real Estate to Fixed Income pending the finalization of due diligence activities on the strategic land purchase.
As discussed to achieve our objective of expanding collections of contributions from workers through collaboration with key stakeholders as agreed in our meeting, provide an allocation of Shs 6 Billion from the operating budget of Shs 220,885,834,375 (Two hundred and twenty billion, eight hundred and eighty five million, eight hundred and thirty four thousand, three hundred and seventy five shillings) to cater for the following priorities;
1.Undertake Budget Monitoring and oversight of the key activities of the Fund, Diaspora mobilization to facilitate their voluntary savings under The Fund, Media engagements and Benchmarking for skills development.
2.Development and deployment of an online application (system) for tracking non-compliance of employers and lodging online complaints by employees on non-compliance in remitting employees’ contribution to The Fund.
3.Strengthening inspection and compliance of the implementation of the National Social Security Fund Act by employers in respect to contribution through peer-to-peer enforcement and technical support to the employee’s on standardization of contracts for workers to incorporate NSSF contribution.
4.Enhancing partnerships and collaborations through stakeholder engagements. These stakeholders include, but not limited to; Parliament, Federation of Uganda Employers’ Association, Private Sector Foundation, Uganda Manufacturers Association and Labour unions among others.
I note your explanation under expenditure on voluntary staff retirement aimed at re-organization to align NSSF with a new business model. Some of the workers have petitioned me complaining that management intends to conduct restructuring that will force them to retire. Please provide me with a clear explanation on the criteria approved by the board to implement the restructuring programme.
Finally, the leadership of Judiciary has notified me of the plan by The Fund to construct courts for the Judiciary. I take note that we have a specialized court for labour matters.
The Industrial Court. I would like you to provide me with a clear rationale for this arrangement before any funds are spent on this project. Accept, Chairman, the assurance of my highest appreciation of your leadership to steer The Fund.
