The appointment early this month of Patrick Ayota as caretaker Managing Director at the National Social Security Fund (NSSF), was supposed to be a temporary measure to allow the board and appointing authority to conclude on either reinstating Richard Byarugaba as head or name a new chief.
A decision on the appointment of (the) Fund’s chief executive was actually expected before the lapse of Byarugaba and Ayota’s contracts.
While Ayota was December 1 named the acting National Social Security Fund managing director and substantive deputy for the next five years, a decision was not made on Byarugaba’s contract.
What has followed has been accusations and counter-accusations by NSSF stakeholders, including the appointing authority Gender and Labour ministry. The New Vision even reported that President Yoweri Museveni has ordered a probe into affairs at the fund.
The NSSF board chairman Dr Peter Kimbowa added to the ongoing speculation by issuing a statement titled, “Update on the appointment of NSSF Managing Director”.
PRESS RELEASE: Update on the appointment of NSSF Managing Director. pic.twitter.com/b6XOU9vSIl
— NSSF Uganda (@nssfug) December 23, 2022
Kimbowa’s statement confirmed that the appointing authority has moved attention from picking a new MD to now conducting a due diligence exercise at NSSF.
“We would like to inform members, stakeholders and the public that the process leading to the appointment of a substantive Managing Director for the national Social security Fund (NSSF) is still ongoing. Following consultations with various stakeholders, the appointing authority is conducting a due diligence exercise following the recommendations of the NSSF Board of Directors,” Kimbowa said.
“In due course, NSSF members and the public will be informed of the outcome of the due diligence exercise, and subsequent appointment of a Managing Director.”
NOTU raises red flag
Fears have been raised that the fund is now being forced to use workers’ money to pay for activities of a government ministry, and a trade union body closely linked to a board member. This is even after NSSF’s earnings were badly dented by the COVID-19-inspired 20% premature benefits payout that saw annual interest for the first time in a decade dipping to a single-digit percentage.
The National Organisation of Trade Unions -NOTU, the apex organization of workers’ associations, has raised a red flag over what could be siphoning of workers’ cash from NSSF.
This comes after information surfaced that the other workers’ group, the Central Organisation of Free Trade Unions, COFTU, has asked the Fund for Sh 1 billion to fund its activities.
The activities, according to the request include “enhancing awareness and training in financial literacy of Ugandans, enhancing cooperate social responsibility and mobilizing and engaging stakeholders,” among others.
As if a worker’s union going after workers’ statutory savings for its activities is not alarming enough, the government itself through the Minister of Gender, Labour and Social Development is said to be requisitioning sh6 billion for basically similar activities, which has raised concern among the workers.
It is not clear why the ministry did not budget for its activities to be financed by the Treasury/ Consolidated Fund and instead seeks to use workers’ savings from a fund whose profitability has been severely affected by the COVID-19 fallout.
NOTU Chairman General, Usher Wilson Owere says COFTU Secretary General Sam Lyomoki is taking advantage of a loophole at NSSF that has enabled the MOGLSD to access the money. Minister Betty Amongi earlier this year requested NSSF to avail her sh 6 billion through the Fund’s 2022/23 budget to allegedly promote its accountability and mobilization of savings.
Specifically, the funds would be used to “undertake budget monitoring and oversight of the key activities of the fund, diaspora mobilization to facilitate their voluntary savings under the fund, media engagements and benchmarking for skills development,” according to the letter.
Owere says that Managing Director, Byarugaba declined the request and notified the Minister of Finance, Planning and Economic Development. Owere claims this prompted Amongi to find a way of evicting Byarugaba from office.
Owere says that he protested to the Minister on grounds that Byarugaba’s contract was due to end in December and that she could not terminate it. But Minister Amongi has dismissed Owere’s accusation, indicating that he is just an angry man because of his recent troubles, and implied that Owere is no longer the rightful leader of NOTU.
The request by Amongi has reportedly been included in the budget after a directive by the Acting Managing Director Ayota, who has just been given a new contract as Deputy Managing Director.
Owere alleges that Amongi also asked workers’ organizations to write petitions to her alleging corruption against Byarugaba, so as to strengthen the case for his dismissal. Lyomoki’s COFTU was one of those that wrote a petition.
This, according to Owere, shows that Lyomoki has found a way of accessing NSSF Funds because of his support of the Minister’s efforts against Byarugaba.
Lyomoki, who is also a member of the Board of Directors of NSSF said they have a Memorandum of Understanding with the Fund to “cooperate and work together to increase social security coverage, improve compliance rates for mandatory contributors and empower members,” among others.
He says the money will be for financial literacy activities, upgrading of the COFTU Information Management System, mobilizing and engaging stakeholders, and corporate and social responsibility or investment.
Owere says that his opposition to these ‘illegal’ activities by Minister Amongi is the reason NOTU is facing a crisis. A section of NOTU members recently held a meeting and voted to replace Owere as Chairman General accusing him of mismanagement and dictatorship, among others.
He now says Minister Amongi is behind these controversies.
The Minister, in her response to these allegations, indicated that Owere is no longer the rightful leader of NOTU and therefore had no authority to speak for it.
She admitted meeting with the NOTU leadership faction that is opposed to Owere, including one in the past week.
“When you say ‘NOTU’, who are you talking about? First, establish who the leadership of NOTU are!” she said, adding that she “chaired a meeting with people who have dislodged him from office, the reason he is annoyed.”
Amongi said the money she requested was for promoting partnerships between critical agencies like parliament, the Private Sector Foundation Uganda, Uganda Manufacturers Association, and labour organizations.
She is also yet to effect the ‘guidance’ by the Prime Minister that arose from the cabinet subcommittee meeting in which the president told her to see that Amongi reappoints Bayrugaba. Owere says Minister Amongi should be investigated by a presidential team over her alleged activities and influencing resource allocation at the NSSF.
The NSSF Amendment Act 2021 made the Minister of Gender, Labour and Social Development a co-supervisor of the fund, responsible for the management and supervision of social security, while the Minister of Finance, Planning and Economic Development is charged with the supervision of its finances and investments.
