Uganda’s Retirement Sector Marks Improved Efficiency
By Admin
The contribution of Uganda’s Retirement benefits sector to the country’s GDP has recently increased from 8.5% in 2017 to 10.3% in 2019. This has been revealed by Martin Nsubuga, the CEO of the Uganda Retirement Benefits Regulatory Authority during the dissemination of the 2019 Sector performance Report.
“The Retirement benefits sector remains a key contributor to the national economy. In 2019, Gross Domestic savings contributed 21.3% of the GDP, with more than half coming from the retirement benefits sector. Contribution to national GDP has steadily grown from 5.2% in 2014 to the current rate of 10.3%,” Nsubuga said.
This growth has been reflected in the retirement benefits sector investment portfolio that increased from UGX 11.8 trillion in 2018 to UGX 14.28 trillion in 2019. This positive trend is attributed to a strong supervisory regime implemented by the sector regulator, which in this case is URBRA.
Retirement benefits schemes continued to invest in a wide range of assets that were resilient to economic shocks despite the COVID- pandemic. These schemes included government securities, investment property, fixed deposits, quoted and unquoted equities, corporate bonds, unity-trusts, and guaranteed funds.
Over the past five years, the retirement benefits sector has achieved an average growth in assets of 20% per year largely on account of investment returns, giving savers an average interest rate of 10% annually.
Notably, currently, the key retirement benefits arrangements available include NSSF with 1,954,787 members; public service pension scheme covering 391,376 members; the Social assistance grant for Empowerment (SAGE) consisting of 166,498 members; Parliamentary pension Scheme with 973 members: voluntary segregated schemes covering 31,343 members, umbrella schemes covering 12,954; while supplementary individual schemes cover up to 2,029.
Going forward Mr. Nsubuga said that URBRA will enhance its risk-based supervision capabilities to ensure that all risks are identified in real-time and mitigated accordingly.
