The Parliamentary Select Committee on the state of affairs at Uganda’s National Social Security Fund (NSSF) has released its anxiously-awaited report, recommending that among others, the Minister of Gender, Labour and Social Development, (MGSLD), Hon Betty Amongi Ongom, at whose instigation the probe was constituted, resign immediately.
The Hon Mwene Mpaka Rwamirama chaired the probe committee, found the Minister guilty of abuse of office, bordering on corruption as well as going beyond her powers to put the Fund’s board and management under pressure to make certain investments, which is outside her powers and without doing the necessary due diligence. The Committee also found wanting, her handling of the appointment process of the Managing Director and Deputy Managing Director
“The actions of the Minister of Gender, Labour and Social Development, Hon. Betty Amongi Ongom, in directing UGX 6 billion to be availed to her ministry, amounts to abuse of office since the Minister, being the supervisor of NSSF, without any law empowering her to do so and knowing that Ministry activities are financed through appropriation did an act which is prejudicial to savers funds and the just administration of the NSSF. The actions of the Minister are arbitrary and an abuse of duty under the NSSF Act thereby bringing her conduct within the ambit of the prohibitions under Section 11 of the Anti-Corruption Act on abuse of office. The Committee, therefore, recommends that the Minister of Gender, Labour and Social Development, Hon. Betty Amongi resigns in public interest with immediate effect. We further recommend that the President should take been interest in the Minister’s conduct above,” recommended the Committee.
The Parliamentary Select Committee was set up, following Hon Betty Amongi Ongom’s presentation of a statement titled: “The State of Affairs at the National Social Security Fund”.
Upon debate of her report, and in a bid to ascertain the causes of the salient issues highlighted in the minister’s report, the Rt. Hon. Speaker of Parliament, in accordance with Rule 190 of the Rules of Procedure of the Parliament of Uganda, constituted a Select Committee to investigate the State of Affairs at the National Social Security Fund on 25th January 2023.
The Committee in its report, presented to the august house on 1st March 2023, also observed that the action of the Minister of Gender, Hon. Betty Amongi Ongom, in directing the NSSF Board to invest UGX 40 billion in the Grain Council of Uganda was outside her powers under the NSSF Act since investment decisions are a preserve of the Minister of Finance under Section 30 of the NSSF Act.
“The actions of the Minister tantamount to abuse of office. The Committee observes that the nature and category of investment was not clear and its subsequent benefits to the savers and NSSF could not be ascertained by the Committee, thereby rendering ing the above decision a breach of the fiduciary duty imposed on the Board under Section 4 (3) of the NSSF Act,” adds the Committee.
Hon Betty Amongi was also faulted for casually delaying the appointment of the NSSF Managing Director over baseless allegations, she had no evidence of.“The Committee noted with concern the casual manner in which the tenure of Office of the Managing Director and Deputy Managing Director was being handled contrary to sections 39 and 40 of the NSSF Act, as amended,” the Committee said in their report, adding: “The continued deferral of the appointment of the Managing Director, NSSF is causing managerial gap and thereby subjecting the savers’ funds at risk”.
On the various allegations made by the Minister against former Managing Director, Richard Byarugaba, the Committee said the minister had not presented any evidence to back up the said allegation. The Committee also noted that most of the allegations against the former Managing Director had been personalised, yet they were collective decisions of the NSSF Management.
“The Committee notes that Hon. Betty Amongi Ongom’s allegations contained in her letter of 7th December 2022 justifying the deferral of re-appointment of the Managing Director were personalised to Mr. Richard Byarugaba yet the same would largely apply to Mr. Patrick M. Ayota, the Deputy Managing Director to the Fund since all initial decisions are taken at the management committee level where both MD and DMD participate for approval before they are sent to the Board for approval,” the committee noted with concern.
On the supervision of the Fund, the committee said that the dual oversight mandate of the Fund by two Ministries- the Ministry of Finance, Planning and Economic Development and that of Gender Labour and Social Development had become problematic, causing “delays in decision making in the NSSF, creating loopholes for corruption and has blurred lines of responsibility and accountability from the two ministries”.
“The Committee recommends that Parliament should streamline the dual supervision of the Fund. It is global practice to see pension funds as financial institutions and consequently investment vehicles and not labour institutions as was envisaged during the amendments of the NSSF Act. We strongly recommend that the NSSF Act be amended to give full supervision of the Fund with the MoFPED. We further recommend that the appointment of the Managing Director and Deputy Managing Director should be vested in the Minister responsible for finance. However, the Minister responsible for labour will remain with the sole responsibility for the appointment of Board members for checks and balance,” the committee observed.
Other recommendations on board and management
While the Committee noted and appreciated Mr. Richard Byarugaba and the entire management of NSSF for their effort in growing the Fund from UGX 1.7 trillion in 2010 to UGX 17.3 trillion as at end of the 4th quarter of 2022, the Committee among others faulted them for the initiation of the UGX 1.8 billion in payments to various stakeholders under the Corporate Social Responsibility/ Investment vote and ordered that they step aside for full investigations.
“The committee therefore, recommends that the NSSF management that participated in the initiation of this UGX 1.8 billion budget for donations much as they did not participate in the final approval; MD Mr Richard Byarugaba, DMD Mr Patrick Ayota, CFO Mr Stevens H. Mwanje, Head of Marketing and Corporate Affairs, Ms Barbra Arimi Teddy, should step aside with immediate effect for investigations by the Office of the IGG, for the offences of abuse of office, corruption and conspiracy to commit a felony with a view of immediate prosecution,” the report says.
The Committee also found out that the two COFTU representatives on the NSSF Board, Hon. Dr. Sam Lyomoki and Ms Peninnah Tukamwesiga, were illegally nominated for appointment by the Minister of Finance, Planning and Economic Development to the NSSF Board and recommended that they be recalled. It also ordered that various payments made to board members and trade unions illegally be refunded or the culprits face prosecution by the Office of the DPP.
The committee also noted that it was erroneous for NSSF to extend an unsecured loan of UGX 11 .05 billion to Uganda Clays Limited in 2010 without conducting due diligence on its creditworthiness, which accrued interest of UGX 13.26 billion, totalling UGX 24.221 billion. The committee further notes that the principal and interest was mysteriously capped at UGX 20.592 billion in 2016 by the Board, therefore, putting savers’ money at risk and recommended that “current management should take all necessary legal action with immediate effect to have the loan secured and paid”.
The Committee also recommended that the IGG should conduct a lifestyle audit on the former MD, Mr. Richard Byarugaba, the Ag. MD Mr. Ayota Patrick as well as several other of the Fund’s senior management and report back to Parliament.
For these and other failures identified in the report, the Committee blamed the board for failing “to ensure that there is a secure, profitable and effective financial management of the fund for the benefit of the workers in particular and the county at large as stipulated in Section 4 of the NSSF Act,”
The Committee, therefore, recommends that the “12th NSSF Board be dissolved by the Minister of Gender, Labour arid Social Development, Hon. Betty Amongi Ongom, with immediate effect and a new board constituted”.