By Our Reporter
The economies within East Africa, where the National Social Security Fund (NSSF) has investments, weakened in 2015/16 but that did not stop the accumulation of assets by the fund. The assets have grown to Ushs 6.6trillion, a rise of Ushs 1trillion from Ushs 5.6trillion in 2014/15. According to Richard Byarugaba, the Managing Director NSSF, the growth in the assets was because of increased member contributions from a monthly average of Ushs 57.3 billion in 2014/15 to Ushs 66 billion.
NSSF has spread its risks in the region by investing in the low risk area of government debt in Kenya, Uganda and Tanzania. In Uganda, the specific target were treasury bills and bonds valued at Ushs 414 billion. In Kenya, the investment spread was between actual government securities and infrastructure bonds. In Tanzania, the focus was mostly premised on tax incentivized government infrastructure bonds.
The yield curve on government debt in the region went up during the financial year as governments in the region generated more returns. In Uganda the yield curve surged upwards north of 23% and 21% respectively for tenures between 1 year and 3 years up from about 16% and 14% respectively. That meant that for the short-term tenures, NSSF was able to make a good return on investment.
“Realized revenue went up by 21% from Ushs 583 billion to Ushs 708 billion, mainly due to the improved interest rate regime and higher dividend income obtained from equity investments. Treasury yields improved across all maturities, rising above the 17% mark compared to last year at 16.7%,
