The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | Officials from the Uganda Retirement Benefits Regulatory Authority (URBRA) have told Parliament that it is illegal for the National Social Security Fund (NSSF) to give out loans to different entities.
Led by the URBRA Chief Executive Officer Martin Nsubuga, officials from the Authority on Thursday appeared before the select committee inquiring into activities of NSSF regarding their supervisory role of the Fund.
Established under the URBRA Act, 2011, the Authority is supposed to regulate the establishment, management and operation of retirement benefits schemes in Uganda in both the private and public sectors.
While appearing before the select committee, MPs queried URBRA officials whether it was regular for NSSF to give out savers’ money in form of loans to different entities.
The committee on Wednesday established that the Fund management had extended an unsecured loan of 11 billion Shillings to Uganda Clays Limited in 2010, and the loan has over the years accumulated interest and now totals 20 billion. Since 2010, NSSF has not recovered a penny from Uganda Clays Limited.
Also before the committee are documents indicating another loan of 29 billion that was extended to the Housing Finance Bank. Mwine Mpaka, the Select committee chairperson said that the financial books of NSSF currently show that Housing Finance Bank has a balance of 9 billion but there is no trail indicating payment of 20 billion.
Now in his submission to the select committee, URBRA Chief Executive Officer Martin Nsubuga said that it is irregular for the Fund to give loans since it is a Scheme and therefore not supposed to extend loans.
Rita Faith Nansasi, the URBRA Director Legal Services added that it was illegal for NSSF to give out loans. She quoted Section 68 of the URBRA Act that restricts savings Funds from giving out loans to private companies.
“The funds of a retirement benefits scheme shall not be used for speculative investments, be lent to any person, except through securities sold on the open market, used to make direct or indirect loans to any person, be used as security for loans,” reads part of Section 68 of the URBRA Act.
MP Mpaka further questioned the URBRA officials whether they have details about the 11 billion loan to Uganda Clays Limited and the URBRA CEO, Nsubuga said that when they learnt about the loan, they raised issues with NSSF about the matter.
He further explained that the loan has now been restructured, and that NSSF has since secured a land title as security.
“Our interest is to protect savers’ funds. URBRA performed an onsite visit and has demanded for a loan re-payment plan,” said Nsubuga.
MP Mpaka further questioned whether the land title is equivalent to the loan amount, but Nsubuga noted that there has not been any valuation of the land. The committee also learnt that URBRA had not seen the land title in question and has no any other specifics regarding the land.
This was after Daisy Nabakooza, the Director Supervision and Market Conduct told the committee that information regarding the land was only sent to them by NSSF recently and part of it was verbal.
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