NSSF Savers are demanding higher interest rates on their savings as the fund’s assets surge to Shs22.13 trillion. The National Social Security Fund (NSSF) is set to announce its interest rate for the 2023/24 financial year, with expectations of a double-digit increase. This comes as the fund reported impressive financial results, with earnings reaching Shs2.53 trillion, up from Shs2.2 trillion the previous year.
This call for better returns by NSSF Savers is fueled by the fund’s strong performance, particularly in regional investments. NSSF saw positive returns on its equity investments in Kenya, Tanzania, Uganda, and Rwanda, as well as stability in the regional debt market. Usher Wilson Owere, from the External Labour Powerhouse, argues that the impressive growth justifies competitive interest rates for workers.
However, the Security Fund faces challenges in meeting the demand for low-cost housing despite its growing assets. The fund’s current real estate investments are primarily focused on middle income and high end properties.
NSSF’s Kasaato suggests government intervention through subsidies and incentives for private investment in low-cost housing. He proposes that the government cover 50% of project costs, provide serviced land, and offer tax rebates to make such projects more attractive.
High interest rates from commercial banks and the lengthy land acquisition process further hinder private developers from entering the affordable housing market. Shirley Kongai, President of the Association of Real Estate Agents Uganda, proposes a solution for that.
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NSSF should provide affordable and patient capital to real estate investors. This, she argues, would help address the growing housing backlog, estimated to be as high as 200,000 units annually. As the new NSSF board takes shape, it faces the task of balancing the demands for higher returns with the need for socially responsible investments.
The fund’s success will depend on its ability to navigate.
