By John Byarugaba
In Summary
In the past, Uganda missed the chance to use NSSF for development. However, this should not be the excuse for opening the Fund. Kenya, Tanzania and Rwanda have made great gains out of their pension fund
A non-fragmented NSSF can salvage our economy. The recent refusal by commercial banks to reduce interest rates carries a huge message for the country. It proves that the government is powerless and will be driven by such cartels as the economy continues ‘bleeding to irrigate foreign domination’.
The current breed of banks in the country is
monopolistic, foreign-dominated, expensive, and rigid. They discourage
the growth of the banking industry and kill local entrepreneurs, who
have no access to ‘off-shore’ funding. Many people have complained about
how many local entrepreneurs continue to lose their property to banks.
Banks continue to fly out from this poor economy billions of shilling every year yet we all seem to agree that it is their hard-earned profit. Since pre-independence, nearly all leaders have promised to establish a national bank.
Let’s allow NSSF to establish a hybrid bank to serve key areas. We need a national bank, a construction bank, investment bank and an agricultural bank, etc. I would not welcome any more foreign banks in the country.
Cognisant that Parliament has passed the Pension Funds Bill to open up the NSSF; aware that some institutions and individuals here and abroad advocated the opening of NSSF; and considering that the committee tasked to design the Pension Fund liberalisation modalities, should have completed their work in September, I appeal to urge our leaders, especially President Museveni and MPs, to save NSSF and Pension Funds so that the they legally remain collectable by NSSF to maintain that mass that can salvage the economy. Fragmenting the fund will render it useless.
This Bill will undermine the benefits of Pension savings. So, let’s re-think our steps. In the past, Uganda missed the chance to use NSSF for development. However, this should not be the excuse for opening the Fund. Kenya, Tanzania and Rwanda have made great gains out of their pension fund. Besides, NSSF was discouraged from investing in banking.
Recently, NSSF managers wanted to open NSSF Development Bank, but the move was again thwarted on claims that NSSF cannot be a bank. But NSSF started fundinsome commercial banks. Now that the government wants to borrow money from NSSF, the Fund should be turned into a banking institution. It should take deposits and lend money.
Many savers lack collateral security, so their monthly contributions to NSSF act as their security to access loans from the Fund. This will increase productivity and development as well as encourage banking. Therefore, NSSF should not be fragmented rather it should be allowed to introduce new products on the market.
If the government is interested in developing, especially local private sector, there must be a favourable pro-Ugandan bank to assist. NSSF should establish a national bank - agricultural bank, investment bank, or a construction bank. NSSF Funds will ease the cost of doing business in Uganda and discourage cartel practices. These are very important pillars that can stir up our economy.
The Fund can also go a long way in dispelling the rumour that some of our leaders have interests in some banks. Other money-generating institutions such as Makerere and Kyambogo universities, among others, have the potential hence they can to open own banks. The Ministry of Trade can spearhead this cause. As a country we must have capacity and confidence. Instead of the government guaranteeing foreign companies, NSSF should be guaranteed to build dams for power generation both for local external consumption.
NSSF can also engage in the lucrative Re-Insurance, fuel reserves, Estate Development, Oil Refinery, etc. I often get offended when I hear arguments that Africa is poor because its leaders choose poverty instead of riches to prolong themselves in power. Aware of the ruthless competition and the strangulation machinery, our leaders should create space for themselves and their people irrespective of other considerations. However much we pumper a regime, time will come for them to go, but our country will remain for us all.
Let’s love Uganda more than the regimes. The current crop of leaders needs this more than anybody else, especially when they get out of power. If we do not save NSSF for our development, the people / companies who will have a hand onto this fund will deploy it in the above said pillars selfishly, we shall then try to access our own funds even more expensively.
Happy Golden Jubilee Anniversary. Long live Uganda. For God and more my country!
Mr Byarugaba is a development activist
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