KAMPALA – The National Social Security Fund (NSSF) has said that it has no legal basis upon which to make ad hoc payments to its members in the event of the coronavirus threat.
The NSSF Managing Director, Mr Richard Byarugaba, said the Fund is a social security scheme, created to provide a safety net for members in case of old age or permanent incapacitation and making any emergency payments would require amending the existing law.
“We empathise with Fund members in the face of the uncertainties resulting from the COVID- 19 pandemic. We understand tenements regarding need for partial Payments from the Fund. However, the Fund has no legal basis upon which to make ad hoc payments suggested,” Mr Byarugaba said in a statement on Tuesday, March 24, 2020.
“NSSF is a social security scheme, created to provide a safety net for members in case of old age, permanent incapacitation, or for dependents in the event of death of a member. The current pandemic does not meet any of the above criteria,” he added.
Mr Byarugaba’s remarks come after opposition leader Dr Kizza Besigye said now is the time for the National Social Security Fund (NSSF) to support its subscribers in the face of coronavirus pandemic.
According to Dr Besigye, NSSF should roll out a programme to pay out a portion of members’ savings to afford them vital support thru the COVID-19 crisis. “It’s surprising that @nssfug hasn’t, as yet, rolled out a programme to pay out a portion of members’ savings to afford them vital support thru the #COVID19 crisis. Isn’t this what “Social Security”, a safety net, is about?,” he said on Tuesday, March 24, 2020.
But Mr Byarugaba also revealed that partial payments would be discriminatory.
“The Fund has about 1.5 million members. If these were given relief from the Fund, the vast majority of the 19 million working population would be left out. Thirdly, about 80% of the Fund’s assets are invested in Government Treasury Bonds. If the Fund was to pay all its members a portion of their savings, it would amount to Government buying back its Bonds for us to raise liquidity,” he said.
“This would leave Government short of locally mobilized funds for its social and economic interventions, which would have a more devastating effect on the economy in the long term. We are confident that the Government is putting in place measures to lessen the economic impact caused by the COVID-19 pandemic,” he added.
Eight more coronavirus cases were confirmed in Uganda on Tuesday morning. President Museveni is expected to address the nation and announce more safety measures in the event of coronavirus spread.
Last Friday, the Governor Bank of Uganda, Mr Emmanuel Tumusiime Mutebile, said the impact of coronavirus outbreak on the economy is already visible.
He said Bank of Uganda will provide exceptional liquidity assistance for a period of up to one year to financial institutions supervised by BoU that may require it, Waive the limitation on the restructuring of credit facilities at financial institutions that may be at risk of going into distress due to the coronavirus pandemic and Intervene in the foreign exchange market to smoothen out excess volatility arising from the global financial markets.