The National Social Security Fund (NSSF) of Uganda has achieved a significant milestone, growing its asset base by Shs 6.8 trillion in the year to June 2026, reaching a total of Shs 32.8 trillion. This 26% increase solidifies the fund's position as East Africa's largest financial institution by value. The fund's asset base is now approximately one-eighth the size of Uganda's entire economy, demonstrating its substantial impact on the country's financial landscape.
The NSSF's revenue experienced an even more remarkable surge, climbing 85% to a record Shs 6.51 trillion. This growth was driven by a 21% rise in interest income to Shs 3.49 trillion and a 55% jump in dividend earnings to Shs 369 billion. Additionally, the fund benefited from gains on its regional equity holdings. According to Managing Director Patrick Ayota, these results provide a strong foundation for the fund's Vision 2035 target of Shs 80 trillion in assets.
The NSSF's investment strategy focuses on matching long-term member savings with stable, long-duration assets. The fund's portfolio remains predominantly composed of fixed-income securities, such as government bonds and treasury bills, which account for 76.5% of its assets. However, the fund has been deliberately shifting towards equities, which now make up 18.4% of the portfolio, up from 13.3%. This strategic allocation enables the fund to generate competitive returns for its members while supporting the country's economic development.
The NSSF's large asset base makes it one of the few domestic institutions capable of financing significant infrastructure projects or absorbing economic shocks. The fund's investments have a direct impact on the country's cost of borrowing, as a substantial share of members' savings is used to fund government borrowing. This has contributed to Uganda's 10-year bond yield dropping from 16.86% to 15.23% over the past year. The fund's ability to deliver competitive returns to savers while supporting the government's borrowing needs underscores its critical role in the country's economy.
One of the NSSF's flagship projects, the Pension Towers, is nearing completion, with construction now 83% complete and expected to be handed over in the first quarter of 2027. Commercial letting is anticipated to begin within the current financial year. Although the project has faced delays and challenges, including investigations into the procurement of the contractor and adjustments in designs, it is expected to generate significant returns for the fund.
The NSSF has demonstrated its commitment to cost discipline, with administration costs decreasing to 0.84% of assets from 0.88%. The fund's cost-to-income ratio also improved to 7.7% from 7.9%, indicating that every shilling spent running the fund generates approximately Shs 27 in value for members. The NSSF has remitted Shs 301.5 billion in taxes this year alone and a cumulative Shs 1.216 trillion since FY2020, highlighting its significant contribution to the country's revenue.
The NSSF has also made progress with its voluntary savings product, Smartlife Flexi, which was launched in November 2024. The product has attracted Shs 180 billion in contributions, demonstrating strong early traction. Members will learn how the fund's performance will translate into benefits for them on September 24, when Finance Minister Henry Musasizi announces the annual interest rate at the NSSF's 14th Annual Members' Meeting. The fund is expected to maintain its "Return Promise" of paying a rate above the 10-year average inflation rate plus two percentage points.
Key points
- The NSSF aims to reach Shs 80 trillion in assets by 2035.
- The fund's asset base grew by Shs 6.8 trillion to Shs 32.8 trillion in the year to June 2026.
- The NSSF's revenue increased by 85% to a record Shs 6.51 trillion, driven by interest income and dividend earnings.
