Labour Minister Lt. Gen. Henry Tumukunde has urged the National Social Security Fund (NSSF) to abandon its parastatal mindset and become a driving force in Uganda's economy. Speaking at the 14th NSSF Annual Members' Meeting in Kampala, Tumukunde emphasized that competence, not entitlement, should determine who sits on the board and manages the fund. He questioned whether NSSF is doing enough with the billions under its management, stating that the fund must be felt in the economy and be a driver of economic growth.
Tumukunde pointed to other countries where pension funds play a central role in economic transformation, citing Zambia and America as examples. He suggested that the Fund's name should change to reflect a more active role, criticizing the current approach as too passive. The minister directed sharp criticism at NSSF's governance structure, questioning whether board members and management are selected on merit or retained out of habit. He emphasized that people must compete to stay in the fund and that horizontal exits are necessary.
The minister challenged the assumption that trade union affiliation alone qualifies someone to oversee a multi-trillion shilling institution. He asked whether board members should also qualify to be there based on merit, rather than just their trade union affiliation. Tumukunde warned that he would question the permanent elements of the board, emphasizing that people must qualify to preside over such a big institution like NSSF.
Tumukunde also raised concerns about the divided oversight of NSSF between the gender and finance ministries. He stated that he cannot pass a budget and have it spent without his consent, emphasizing that he must be asked whether the money should be spent and understand why it is being spent. The minister urged NSSF to adopt the discipline of a private financial institution, asking whether it is trying to bring itself to a typical private running enterprise or simply protecting its gains.
The minister dismissed the argument that the Fund's growth is an achievement in itself, stating that the economy is growing and salaries are growing, so it shouldn't surprise anyone when the fund grows. He emphasized that the fund must change and that he doesn't see the stories of success. Tumukunde also issued a warning to employers who fail to remit workers' contributions, stating that non-compliance should carry consequences for their trading licences.
Tumukunde closed with a direct challenge to the Fund's leadership, stating that he can't afford to be polite and that for the few years he will be there, NSSF must perform. He emphasized that NSSF must see itself not simply as a custodian of savings but a catalyst of Uganda's economic growth. The remarks came despite NSSF declaring a record 22.53% interest rate for the 2025/26 financial year, with assets under management growing to Shs32.8 trillion.
Fund Managing Director Patrick Ayota assured members that their money is safe, citing strong performance in regional stock markets and currency appreciation as key drivers of the Fund's growth. The NSSF's growth has been significant, but Tumukunde's call for change is clear. The minister's statements have set the stage for a potential overhaul of the Fund's governance structure and investment strategy.
Key points
- Tumukunde challenges NSSF to abandon parastatal mindset and become an economic catalyst.
- The minister criticizes NSSF's governance structure and questions whether board members are selected on merit.
- Tumukunde warns employers who fail to remit workers' contributions of consequences for their trading licences.
