How your NSSF money is spent 

In testimony before the House committee probing the National Social Security Fund (NSSF), the minister of Finance, Planning and Economic Development, Matia Kasaija, said he disagreed with Betty Amongi, the minister of Gender, Labor, and Social Development’s request for Shs 6 billion from the fund.

The former managing director Richard Byarugaba and Kasaija, told parliament that the Shs 6 billion request, which was not granted by the NSSF board, was irregular. Amongi claims that the money was meant to facilitate the fund’s activities.

“In the meeting with Amongi, I disagreed in principle. I have been running the show as finance minister, and we are short of money for sure, but I will never ask NSSF to give me money because it is not for public expenditure. If I want money, I will go to the Treasury,” Kasaija told the seven-member committee chaired by Mbarara City South MP Mwine Mpaka.

The committee has one month to report its findings to parliament. Other members include Charles Bakkabulindi, Karim Masaba, Fortunate Nantongo, Laura Kanushu, Richard Muhumuza Gafabusa, and Amos Kankunda.

The committee was set up by Deputy Speaker of Parliament Thomas Tayebwa to investigate corporate governance structures at NSSF, examine circumstances surrounding the appointment of the fund’s managing director, and evaluate the status and safety of savers’ money. Kasaija said it was irregular for the minister supervising the NSSF to ask for money from the fund.

“They should request money from the Treasury because NSSF money is not ours; it is the workers’ money,” he said.

During the committee hearing, the deputy secretary to the Treasury, Patrick Ocailap, said Shs 6 billion was not approved. He said when they sent the NSSF budget to Amongi for approval, she introduced the counterproposal for a Shs 6 billion re-allocation.

“From the Treasury, where I sit, I did not approve that money because it was irregular,” he said.

Kasaija said they had a good working relationship with Byarugaba, and whenever they had challenges at the fund, he would summon them to explain.

Byarugaba’s submissions

In his submission, Byarugaba said the Shs 6 billion, which was requested to facilitate the 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’ contributions to the fund, and other activities, were already accounted for in the budget and there was no need for more money.

“When the request for Shs 6 billion arrived, I opened my eyes and asked myself. How will I demand accountability from my supervisor? How will I discipline my supervisor and the ministry if these funds were misappropriated?”

He said in his career as a public servant, and private person, he had never gotten a request for funding from his supervisor – be it at the ministry of finance or the regulator, and he never expected it to come from the ministry of Gender.

After the NSSF Act was amended last year, supervision of the fund was handed over to the ministries of finance and gender. Before that, the fund was supervised by finance.

“She called us to her office, but in that meeting, we told the minister that we had already budgeted for these items. Go to the June 10, 2022 letter I wrote to her. Sensitization and engagement with employers (Shs 678 billion), planned activities with the ministry of Gender and Public Service (Shs 1.8 billion), strengthening compliance and labor laws (Shs 219 billion). Online System (Shs 1.8 billion), Corporate Social Responsibility (Shs 1.2 billion), the High Innovator Program with MasterCard (Shs 4.1 billion), financial literacy, and business development (Shs 400 billion). These amounts had already been budgeted,” he said.

What he didn’t say is how these activities add value to savers or the fund’s investment portfolio.

“All the allegations have never been presented to me; they are baseless, wild, and there is no evidence. The IGG, who is meant to investigate the allegations, is not in touch with me. I call myself a victim; the minister and the fund have portrayed me as a villain, and to be quite open, I am a victim,” he said.

“We have had six audits by IGG on my personal finances: bank accounts, assets. We have had the auditor general issue qualified audits for the last 10 years I have been at NSSF, and the PPDA has done audits on all our procurements for the last 10 years. We have turned out to be the best-performing entity, and these audit reports are available. We have had over 10 companies from within the country and outside come to benchmark our best practices,” he said.

Byarugaba said that in less than one year since NSSF was transferred to the ministry of Gender, corruption, influence peddling, delayed decision-making and scandals are back to haunt the savers. He asked legislators to recommend his reappointment, noting that the allegations against him are baseless and trivial.

“Surely for a fund that has been performing so well, how can those allegations be sustained, even to a common-thinking man on the street? The allegations cannot be attributed to me as an individual. This is a witch-hunt; victimization, and I cannot comprehend why anybody would want to make these allegations, and not back them up with any evidence. I want the investigations to be done, but there is no reason for me not to be in office,” he said.

He said the board remains disunited and the government remains silent despite all the petitions lodged by various individual board members. Several petitioners have called for the removal of Sam Lyomoki from the board for allegedly disrespecting his fellow members.

Byarugaba revealed that Lyomoki requested Shs 1 billion from acting managing director Patrick Ayota the moment he left office.

NSSF Board Chairman speaks

In his testimony, NSSF Board Chairman Peter Kimbowa said Amongi’s cash request of Shs 6 billion for the expansion of social protection was irregular. He said the money was not approved by the board because there was no work plan to back it up.

Kimbowa said the board requested management to come up with a comprehensive work plan and examine how the various activities  would be resourced. Kimbowa’s submission, however, contradicted a statement made by the minister during a plenary sitting on January 19, 2023.

Committee member Karim Masaba read the parliamentary record in which the minister said that the NSSF board approved the request for the Shs 6 billion and the work plan.

According to the letter written to Kimbowa about the approval of the National Social Security Fund budget for the financial year 2022/23, the minister said that 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 billion to 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.”

“…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’ contributions to The Fund,” the letter reads in part.

The funds were also intended to strengthen employer inspection and compliance with the National Social Security Fund Act in terms of contribution through peer-to-peer enforcement and technical assistance to employees on the standardization of contracts for workers to incorporate NSSF contribution.

The money was to be used to enhance partnerships and collaborations through stakeholder engagements. These stakeholders include, but are not limited to, Parliament, the Federation of Uganda Employers; the Private Sector Foundation, the Uganda Manufacturers Association and labor unions, among others.

Amongi defends herself

Appearing before the committee, Amongi said; “It is worth noting that the Shs 6 billion I approved is appropriated under the NSSF operation budget for Financial Year 2022/23 and the work plan was presented to me by the board and management.”

Amongi said she requested the funds under Article 29 of the NSSF Act, and the board and management reviewed and approved the work plan and incorporated the Shs 6 billion in the fund’s operations budget.

She said her feud with the management of NSSF followed her refusal to approve the Shs 400 billion request for the purchase of land and the Shs 370 billion request for the construction of a labor court.

“They came to me and explained, but I was not satisfied with their explanation. I decided that the implementation of strategic land purchases totaling Shs 400 billion under the real estate component should be postponed pending the completion of a due diligence report. I asked them about the titles, and due diligence; they didn’t adduce them,” she said.

She said the board asked her to approve US $1 million they had negotiated with the Judiciary to construct a specialized high court for hearing workers’ cases.

“When I contacted judiciary officials, they told me, even if you construct, we cannot say this is a court for dealing with workers’ issues only. We can only prioritize their cases; so, I refused and asked them to invest the money,” she said.

NSSF’s Untraceable land titles

The chief executive officer of the Uganda Retirement Benefits Regulatory Authority, Martin Nsubuga, shocked the committee when he said the fund has no land title for the Workers House. NSSF officials had claimed that the title is held by Alcon International Limited, the Kenyan firm, contracted to build the Workers’ Houses.

According to the agreement, Alcon used the title to secure a bank loan.

“According to the information provided to us by NSSF, they were unable to locate Alcon; however, in order to protect the property, they placed a caveat.” Currently, there are two caveats on the title, one by Alcon and another by NSSF. The fund is in the process of getting a special land title.

“A special title cannot be issued until the original title can be traced, and a caveat cannot be lifted until you provide proof that you discharged the obligation that prompted you to direct the ministry of Lands to put it,” he explained.

According to the Daily Monitor, questions surrounding the claim by Alcon International Limited regarding the safety and ownership of Workers House were resolved after the High court dismissed its case against NSSF. Alcon International Limited had sought compensation for the alleged breach and termination of the construction contract for Workers House in Kampala.

Justice David Wangutusi of the Commercial division of the High court ruled that there is no cause for action in a place where the pleadings speak of Alcon International Kenya instead of Alcon International. The MPs also learned that NSSF has no land title for the Temangalo land. The fund purchased that land from Amos Nzeyi, but the title is still under his name.

Shs 100 million withdrawn

The treasurer general for the Central Organization of Free Trade Unions (COFTU), Joseph Mbabazi, revealed that the secretary-general, Dr Sam Lyomoki, irregularly withdrew Shs 100 million from the union’s account. The funds provided by NSSF were meant to facilitate financial literacy.

“I told Dr Lyomoki that we needed to account for that money, and that is when he said that it had come from NSSF for an activity, but they are the ones going to supervise it, and the coordinator is Peninah Tukamwesiga. I have yet to receive accountability for the Shs 100 million that came from NSSF.”

Earlier, Vincent Elong told the MPs that members of COFTU, the Board, and the CEC acknowledge that “Dr Sam Lyomoki, our secretary-general, has persistently and continuously stood in breach of the objectives and principles of COFTU.”

“He has done it through his conduct, which notably includes self-nomination together with Counsel Peninah Tukamwesiga to NSSF board without the knowledge, approval of CEC members,”

The NSSF management claimed that they had not been held accountable for the $100 million.

Background

The investigations stem from allegations of corruption and mismanagement of the Shs 17.9 trillion fund and the controversies surrounding the reappointment of the then managing director, Richard Byarugaba, who had clocked the mandatory 60 years of retirement.

On November 30, 2022, Dr Kimbowa petitioned Amongi, recommending Byarugaba’s reappointment. He premised his justification on the fund’s 12-year growth to a balance sheet size of Shs 17 trillion ($4.5 billion). The board said the reappointment of Byarugaba would fill the managerial gaps that would put the workers’ funds at risk.

Betty Amongi, however, deferred his reappointment. The two fell out after Byarugaba refused to sanction the Shs 6 billion for the minister’s planned activities to support NSSF regarding contribution compliance by employers and also enhancing contributions.

Amongi claimed that corruption, collusion with contractors, indiscipline, and other allegations raised by Gen Salim Saleh when he hosted the NSSF top brass at Kapeeka on June 12, 2022, constrained her.

However, a parallel group, which includes disgruntled NSSF officials, had already lined up Byarugaba’s deputy, Patrick Ayota, to take over the helm. Byarugaba and Ayota have had a relatively warm relationship and stuck together during the acrimonious time in 2016 and 2017 when Geraldine Ssali, the former deputy managing director, clashed with Byarugaba.

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