• Sun. May 28th, 2023

NSSF on Fire over Uganda Clays UGX11 Billion Loan

UGANDA, Kampala | Real Muloodi NewsThe National Social Security Fund (NSSF) has come under fire from lawmakers over a loan of UGX11 billion it gave to Uganda Clays.

During a meeting of the select committee investigating allegations of the fund’s mismanagement, Hon. Mwine Mpaka, the committee’s chairperson, questioned the NSSF’s decision to provide an unsecured loan to a company that was making losses between 2008 and 2010.

The Auditor General’s management letter revealed that the loan was disbursed in 2010, with a repayment period of 96 months, but up to date, no amount has been recovered. This prompted Hon. Charles Bakkabulindi to seek clarification on the difference between the savers’ fund and commercial banks.

Hon. Richard Gafabusa also questioned if a risk evaluation was performed before the loan was disbursed, to which the NSSF’s Head of Risk said it was irregular to give an unsecured loan to Uganda Clays.

However, the former NSSF Managing Director, Richard Byarugaba, explained that the loan was provided to enable Uganda Clays to expand production.

Despite losses, the company sought to set up a new factory in Mbale, but the products that were produced did not sell well. The NSSF intervened and took over management to recover the loan.

The NSSF also came under criticism for causing the fund a loss of UGX2.6 billion in the procurement of smart cards and point-of-sale machines for savers. In partnership with Centenary Bank, the NSSF launched a three-in-one smart card in July 2022.

Savers were meant to access merchandise at discounted prices using the card.

However, Hon. Mwine Mpaka highlighted the Auditor General’s report, indicating that since its launch, the product has not been used.

NSSF’s Head of Procurement, Gerald Mugabi, and former MD, Byarugaba, admitted that the product was a bad choice.

Hon. Gafabusa wondered why the NSSF did not take precautionary measures through ensuring that the contract with suppliers provided a guarantee to the fund.

Despite the criticism, Byarugaba insisted that Uganda Clays had re-instituted the loan on its books, and the fund members are assured that their money is safe.


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