President Museveni addressing the National Executive Committee on Tuesday. Photo by Stephen Wandera
By Ikebesi Omoding
Controversy surrounds the intention by the
National Social Security Fund (NSSF) to lend money to Government. What
would otherwise be a patriotic undertaking is threatened by the manner
in which this government intends to borrow the workers’ money, and its
character; or rather, the manner of the people who would be involved in
the exercises.
On several occasions now, NSSF Managing Director,
Richard Byarugaba has expressed willingness to open up NSSF’s financial
chest of a yearly more than one billion dollars to the government to
borrow to finance the country’s poor infrastructure. Many Ugandans
believe that this is laudable given the prohibitive conditionalities
other lenders such as the World Bank and the International Monetary Fund
(IMF) have usually foisted on the government. But outgoing IMF Country
Representative, Thomas Richardson, has punctured this intention,
regarding it underhanded.
In a parting repartee to Byarugaba, Richardson
noted that the government simply wants to avoid borrowing at the market
rates; that it already has borrowed money which is sitting in the banks
unutilised, gathering dust of exorbitant interest rates which are
payable above the rates that NSSF would offer. In other words the
government is literally digging a smaller financial hole to try to cover
up a bigger one.
Also, Richardson reveals to Ugandans, rather
obviously advantageous to the IMF/World Bank, that the government is
already borrowing from the securities that NSSF buys into; in effect
that the Fund should unload more money to the bonds market if the regime
wants more money for infrastructure, but at the commercial rates that
would be of benefit to the workers to ensure the sustenance of their
future savings. Otherwise, the regime would merely be transferring its
global indebtedness to the workers, whose future payment would be
uncertain.
This dire warning is amplified when one regards
the kind of people who would be entrusted with carrying out the
borrowing. The mindset of the regime officialdom is theft at every turn
of the structure. Richardson delicately calls it “lack of capacity” of
the Ministry of Works staff to plan and manage such projects; “sharp
deviations” from the budget; and, fake supplementary budgets,
specifically to State House. All these add up to runaway corruption
that has engulfed the country. The NSSF billions of dollars would likely
end up being swindled.
Moreover, there is a move afoot to amend the 1967
NSSF Act to liberalise the pension sector. This deregulation would have
the effect of creating other pension funds/schemes which would compete
with the “monopoly” NSSF. But the likely conduit here is that the
scalpers normally referred to as “investors” would borrow this money,
invest into these schemes and with the lax foreign currency transfer
market, get out this money into the untraceable overseas tax havens.
To “liberalise the retirement’s benefits sector”,
the Government in Section 53 (1) of the draft “Retirement Benefits
Sector Liberalisation Bill 2011” proposes that this will make the NSSF
“become responsive to market forces”. This is the exact opposite of what
it would do if it borrowed the money since it is doing so at below the
market rates.
Even if Byarugaba said he was not forthcoming on
giving the money, he would have few options since he is an appointee of
the government. It behoves therefore on the workers’ representatives in
the NSSF to examine the usefulness of this proposition; if possible with
a view to rejecting it in the manner it is presented.
Assurances by the government’s principals on a
range of promises have in the past proved bogus; they simply cannot be
trusted. Unless there are demonstrable arrangements in place to
ascertain two things: one, that Government will pay the workers money;
and, two, that while the money stays borrowed this does not affect the
workers from getting their payments, it would be foolhardy for the NSSF
to agree to the government intentions to borrow this money
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