In­side the NSSF Se­lect com­mit­tee re­port

For ef­fi­cient dis­charge of its func­tions, Par­lia­ment may at any time, upon a mo­tion made af­ter no­tice given, ap­point a se­lect com­mit­tee to carry out in­ves­ti­ga­tions on be­half of the House. This is in­sti­tuted in ac­cor­dance with the pro­vi­sions of the 1995 Con­sti­tu­tion of the Re­pub­lic of Uganda un­der Ar­ti­cle 90 and the Par­lia­men­tary Rules of Pro­ce­dure rule 178 and 179.

Acom­mit­tee in­sti­tuted un­der such a pro­vi­sion has pow­ers to call any min­is­ter or per­son hold­ing a pub­lic of­fice and pri­vate in­di­vid­u­als to sub­mit mem­o­randa or ap­pear be­fore them to give ev­i­dence, have pow­ers of the High Court, com­pel the pro­duc­tion of doc­u­ments, en­forc­ing the at­ten­dance of a wit­ness and ex­am­in­ing them on oath, af­fir­ma­tion or oth­er­wise and is­su­ing a com­mis­sion or re­quest to ex­am­ine wit­nesses abroad.

NSSF is known more for its scandals rather than the work it does – helping Ugandans save for a better future.

On the 10th day of July 2014, Hon. Samuel Odonga Otto raised an is­sue of scan­dals at Na­tional So­cial Se­cu­rity Fund (NSSF) and par­tic­u­larly the re­cruit­ment of the Man­ag­ing Di­rec­tor, Deputy Man­ag­ing Di­rec­tor and Cor­po­ra­tion Sec­re­tary. The Min­is­ter of Fi­nance, Plan­ning and Eco­nomic De­vel­op­ment Hon Maria Ki­wanuka made a state­ment clar­i­fy­ing the de­lay on the re­cruit­ment of the top man­age­ment tier, par­tic­u­larly Man­ag­ing Di­rec­tor, Deputy MD and Cor­po­ra­tion Sec­re­tary. She in­formed the House that she was con­sult­ing widely with rel­e­vant stake­hold­ers and was in the ad­vanced stages near­ing com­ple­tion at that time.

Sub­se­quently, Par­lia­ment in­sti­tuted a se­lect com­mit­tee to in­ves­ti­gate the NSSF, which fi­nally re­leased its re­port in­di­cat­ing the find­ings and rec­om­men­da­tions to the House. This hap­pened dur­ing ple­nary held on 19th of March 2015, eight (8) months from 17th of July 2014 when the com­mit­tee was in­sti­tuted to look into the Na­tional So­cial Se­cu­rity Fund. The life of the com­mit­tee was ex­tended on two oc­ca­sions by the speaker since the ar­eas to cover were too wide.

NSSF was es­tab­lished un­der Na­tional So­cial Se­cu­rity Act Chap­ter 222, Laws of Uganda to pro­vide So­cial Se­cu­rity to pri­vate sec­tor em­ploy­ees, in­clud­ing em­ploy­ees of Non-gov­ern­men­tal Or­gan­i­sa­tions (NGO). The aim is for NSSF to pro­vide so­cial se­cu­rity to the con­tribut­ing mem­bers when they reach the manda­tory re­tire­ment age or be­come in­dis­posed. NSSF as at June 2014, has a mem­ber­ship of 1,319,345 of which 578,000 are ac­tive. The net worth was noted to be at 3.34 tril­lion Uganda shillings.

The terms of ref­er­ence of the com­mit­tee as set by the House were that the com­mit­tee looks into the al­le­ga­tions that NSSF ir­reg­u­larly ac­quired shares in UMEME [Ugan­da’s largest elec­tric­ity dis­tri­b­u­tion com­pany]; al­le­ga­tions of ir­reg­u­lar­ity, nepo­tism and un­fair­ness in the re­cruit­ment process of staff at the NSSF; al­le­ga­tions of ir­reg­u­lar­ity in the dis­posal of NSSF as­sets; and any other mat­ters re­lated to the above.

The com­mit­tee car­ried out pub­lic hear­ings re­ceiv­ing ev­i­dence from the rel­e­vant stake­hold­ers, a study of sec­ondary doc­u­ments such as Acts, re­ports, agree­ments, Prospec­tuses and other of­fi­cial doc­u­ments. It also un­der­took a study visit to Dar Es Salaam to bench­mark the pen­sion sec­tor gov­er­nance and reg­u­la­tion, and an­other study visit to the in­ter­na­tional So­cial Se­cu­rity As­so­ci­a­tion (ISSA) in Geneva to learn about in­ter­na­tional best prac­tice and guide­lines in pen­sion fund gov­er­nance and reg­u­la­tion.

In the per­for­mance of their oblig­a­tions, the com­mit­tee found out that NSSF since 2002 has bought a to­tal of 131,502,300 shares from UMEME at a cost of UGX 36,163,077,500 in both IPO al­lot­ment and sec­ondary mar­ket which took place be­tween 5th and 14th of De­cem­ber 2012. How­ever the trans­ac­tion did not meet get the bless­ings of the At­tor­ney Gen­eral or the So­lic­i­tor Gen­eral ac­cord­ing to their find­ings.

The re­port read to the House high­lights sev­eral agen­cies and in­di­vid­u­als who played a part in the al­leged mis­man­age­ment of NSSF and pro­ceeded to make rec­om­men­da­tions. For in­stance, Com­mit­tee rec­om­mends that Mr Ivan Kyay­onka the Board Chair­per­son of NSSF, be forced to va­cate of­fice for his ir­reg­u­lar ac­tion in push­ing NSSF to pur­chase UMEME IPO shares with­out the ap­proval of the So­lic­i­tor Gen­eral. That man­age­ment and Board of Cap­i­tal Mar­kets Au­thor­ity (CMA) be rep­ri­manded for com­pla­cency for it did not sanc­tion UMEME Ltd or its spon­sor­ing bro­ker for the anom­aly of is­su­ing the prospec­tus be­fore ful­fill­ing all the con­di­tions set by CMA.

The Com­mit­tee also rec­om­mends that Ms Geral­dine Ssali, the Deputy Man­ag­ing Di­rec­tor of NSSF and Ms Cather­ine Byakika the Head Hu­man Re­source be se­ri­ously rep­ri­manded by the ap­point­ing au­thor­ity for mis­man­ag­ing hu­man re­source and dis­miss­ing staff with­out fol­low­ing the law. In ad­di­tion to that it rec­om­mended that the dis­missed staff be re­in­stated at the cost of the two so that the work­ers’ sav­ings are spared from huge com­pen­sa­tion costs.

The Com­mit­tee fur­ther rec­om­mends that African Al­liance, which acted as the bro­ker and seller of the UMEME shares to NSSF be vis­ited with sanc­tions by the Cap­i­tal Mar­kets Au­thor­ity for its role ac­cord­ingly. How­ever, dur­ing the pro­ceed­ings, the Man­ag­ing Di­rec­tor of African Al­liance de­nied any form of foul play in per­form­ing both re­spon­si­bil­i­ties say­ing that they were not paid by NSSF as a re­sult but only got paid by UMEME ltd. Nev­er­the­less, the com­mit­tee was not con­vinced by this in­for­ma­tion be­cause of the con­flict of in­ter­est that hap­pened the mo­ment they took up both re­spon­si­bil­i­ties.

Af­ter such find­ings and rec­om­men­da­tions are made by the Se­lect Com­mit­tees and pre­sented to the House, they are sub­ject to fur­ther de­bate by the mem­bers be­fore any de­ci­sions are made. The de­ci­sion taken by the House could be to adopt the re­port to its en­tirety, make amend­ments to the rec­om­men­da­tions, or the re­port could be dis­re­garded and not adopted. In this case, the Speaker de­ferred the de­bate on the re­port on the re­quest of the mem­bers that they be given time to read the re­port in depth. Whichever di­rec­tion the House takes on the day it de­bates the re­port, I hope will pro­vide so­lu­tions.