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NSSF against bailout funds

NSSF MD Richard Byarugaba

The National Social Security Fund (NSSF) has distanced itself from reports that it may be one of the options government can run to to bail out cash-strapped companies.

The media has been awash with news of 65 firms which need about Shs 1.3tn to save their businesses from creditors. And speaking to The Observer last week, a well-placed official suggested that government could use NSSF savings. No way, according to NSSF.

“Providing funds for the loss-making businesses falls short of the requirements of both the fund’s investment policy and Uganda Retirements Benefits Regulatory Authority Act 2011,” reads the statement signed by managing director Richard Byarugaba.

The fund has assets worth Shs 6.5tn, most of this held in fixed accounts in banks. It collects close to Shs 60bn every month.

“Section 68(1) of the URBRA Act 2011 strictly prohibits lending to any person or institution except through securities sold on the open market. It also prohibits direct and indirect lending or use of scheme funds as security for loans,” Byarugaba wrote.

NSSF has bought shares in Uganda Clays and power distributor Umeme, among other firms listed on the Uganda Securities Exchange.

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