Fund jinx catches another MD over alleged corruption
Kampala, Uganda | Mubatsi Asinja Habati | For the past few months, NSSF has been in the news over a fight between the line Minister Betty Amongi and its out-going but still interested Managing Director (MD) Richard Byarugaba.
Byarugaba is facing allegations of mismanagement and abuse of office, and the Inspector General of Government, Beti Kamya, has ordered a freeze of financial transactions at the NSSF until an investigation of all the allegations against him is completed.
The allegations against Byarugaba and the power fight over NSSF has also attracted the attention of the 11th Parliament with the Speaker Anita Among deciding to form a select committee to investigate what is going at the workers’ Fund.
In the spin and twists of the case, a decision by the NSSF board to give Minister Amongi a whopping Shs6 billion from the fund’s kitty appears to have her cornered. The money is supposedly to facilitate Amongi’s activities in promoting enrollment of more workers that save with the Fund. But this is the mandate of the NSSF management and appears to be a weak cover for pork-barrel politicking at the Fund. What Amongi says she aims to do with the money is already being done by NSSF staff. That is why, when Byarugaba’s camp claim he is being pushed out because he refused to approve the Shs6 billion, many Amongi critics side with him.
The leader of opposition, Masaka Municipality MP Mathias Mpuuga says the minister’s ploy to force the MD out of office for refusing to approve the Shs6 billion to her “raises serious issues that show how NSSF is being usurped and mismanaged”.
“Parliament should help the savers with NSSF to have their money protected,” he says.
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.
This makes Amongi the minister who oversees NSSF. In this capacity on Jan. 11 she held a press conference at the Uganda Media Centre to attempt to refute claims that she had asked for the Shs6billion.
“If I ask for Sh6bn to recover Sh200bn is that unfair? Make your assessment. I wanted NSSF to find this money within its operation budget,” she said.
This followed allegation by embattled NSSF MD, Richard Byarugaba that he was being fought by the Minister because he refused to approve her request for workers’ money.
A leaked letter to the press dated December 7, 2022 shows how Minister Amongi had met Gen. Salim Saleh the chief coordinator for Operation Wealth Creation in Kapeeka to whom she cried out for help to kick Byarugaba out office.
The letter was responding to the NSSF Board’s approval of Byarugaba’s return to head NSSF as the MD. On 30 November 2022, the NSSF Board chaired by Peter Kimbowa had written to Amongi recommending reappointment of Byarugaba for another term of 5 years in spite of having clocked the retirement age of 60.
The Board’s reasoning was that Byarugaba had steered the Fund to greater growth. In 2010 when Byarugaba and his team took over the leadership at NSSF, its assets were valued at Shs15 trillion, and by end of 2022 the Fund boasted asset portfolio of Shs17 trillion. This money is from 1.5 million savers. So any government would want to have control of such an institution.
Already the Government has indicated it is borrowing Shs1 trillion from NSSF to invest in not so productive ventures like building offices for ministries in Bwebajja, on Entebbe Road.
But Amongi’s letter alleges that Byarugaba is corrupt and rigid and not appreciating the role NSSF can play in funding a national company to mill maize for export to Kenya and the region.
Amongi also says Byarugaba is clueless on strategic leadership of the Fund and is adamant to accept proposals from Gen. Saleh on how the workers’ money can be used to develop the agricultural sector in the area of value addition.
Amongi rubbed it in the face of NSSF Board Chairman Dr. Peter Kimbowa that he needs to clarify what will change if Byarugaba leads the Fund again if he doesn’t listen to her advice.
Amongi was not done. She further alleged that she has sources within the NSSF who are ready to meet President Yoweri Museveni to explain how Byarugaba has been getting backdoor deals and kickbacks in some of the NSSF projects.
Amongi accuses Byarugaba of ignoring presidential directives that were requiring him to hand some NSSF projects to specific contractors.
The Independent has learnt that the fight on who takes over NSSF management started way back in May last year. Several meetings were held between the minister of Labour and the President. It is said President Museveni still wanted Byarugaba and the current Acting NSSF MD, Patrick Ayota (who was Byarugaba’s deputy) to carry on the leadership roles at NSSF until suitable candidates had been spotted.
President Museveni had also advised that since Byarugaba and his deputy had clocked the 60 year retirement age and on account of good performance which is not common in many Ugandan parastatals, it was prudent to appoint them on contract basis as a new team to lead the Fund was being sought.
Acting on this advice, Amongi sought the advice of the Ministry of Public Service, which guided that that the two can be appointed on a 3-year contract as per the public service standing orders. However, as if Amongi was not satisfied with public service advice, she sought the advice of the Attorney General, who in turn advised that the duo can get a contract of two years.
Still, Amongi appeared unsatisfied. Concerned by the delayed appointment of a substantive NSSF managing director, on 12 Dec. 2022 the Prime Minister Robinnah Nabbanja wrote to minister Amongi to appoint both Byarugaba and Ayota. But Amongi decided otherwise. She stalled the process.
Naome Kabasharira, MP Rushenyi County in Ntungamo district, said “the minister of Labour should respect authority”.
“If the prime minister directed her to appoint Byarugaba as MD and now she is hiding in the investigation. It is when the matter of approving Shs6 billion came up that’s when she asked Byarugaba to step aside,” she says.
She says the best way to get any fair investigation requires both the MD and deputy MD to step aside as to enable it.
“People are not happy with the way their money is being used,” she says.
Concerned about the media reports about the safety of workers money, Speaker Anita Among, asked Minister Amongi to give a statement to parliament regarding the status of affairs at NSSF. Among argued that the information in the media indicates that the workers savings in NSSF might not be safe.
Workers MP Aston Arinaitwe Rwakajara who was a board member of NSSF in 2007 said there is need to thoroughly investigate what is going in NSSF.
“NSSF is the only hope for non-pensioned workers. So many issues have been coming up but silenced. There is no smoke without fire,” he says, “What is coming out are issues on the surface. We need a deeper investigation.’
He added: “Recently NSSF was launching villas in Lubowa which are on 15 decimals being sold at Shs3 billion. Which Ugandans are able to raise this kind of money? I am told there are cracks on the pension house whereby NSSF has put in a lot of workers’ money. There are mafias and lobbyists in town who are already testing the waters; there is a promise of building ministries offices in Bwebajja using NSSF money. We need to scrutinize these issues.”
The NSSF Act as amended in 2022 provides among others that the NSSF board decides and recommends the MD who leads management and administration of the Fund.
In the midst of this fight, there have been petitions to the President, Chief Coordinator OWC, minister of Labour, police and IGG where whistleblowers within NSSF allege mismanagement. After meeting a number of stakeholders, on 27 December 2022, the board chairman Kimbowa wrote to the IGG requesting for investigation of alleged mismanagement of the NSSF.
“The board of directors of the National Social Security Fund, recommended to the Hon. Minister of Gender Labour and Social Development the reappointment of Mr. Richard Byarugaba as the Managing Director. However, before the final decision could be made on the reappointment, the Hon. Minister received information regarding allegations of mismanagement of the Fund. On that basis, and after consultation with H.E the President of the Republic of Uganda, the reappointment of the Managing Director was deferred pending investigations of the said allegations. The purpose of this letter is to request you to conduct investigations of those allegations….,” reads part of Kimbowa’s letter to the IGG.
The investigation is to last 60 days. “If the investigation finds out that there is no case to answer he will be appointed,” said Amongi.
On December 22, 2022, a team from NSSF and Minister Amongi met President Museveni to seek the way forward.
Troubled timeline of former NSSF MDs
In October 1998, managing director Abel Katembwe was sacked, and his sacking was triggered by a house the NSSF had bought as his official residence. It cost Shs200 million but after renovation, the total cost had jumped to a hard-to-explain Shs400million.
In 2002 NSSF was involved in another scandal where $1.4m (Shs5.1billion) had been lost under unclear circumstances as Alcon Construction, which had been contracted to build Workers House, was preparing to start work. Dr. Yoram Barongo, was sacked due to the botched purchase of Udyam House, among other things.
In 2005, Leonard Mpuuma was fired as NSSF MD for causing financial loss of Shs 8billion and abuse of office.
David Chandi Jamwa, who took office after Mpuuma was fired and jailed in 2011 for causing the NSSF a financial loss of Shs 3billion.