Elias Biryabarema
9 October 2008
Kampala — The Federation of Uganda Employers, FUE has asked the government to force NSSF to freeze all of its planned investment projects until the investigation into its controversial purchase of land is complete and a new Board of Directors instituted.
NSSF is currently being probed by a parliamentary committee on whether it breached rules governing public procurement when it purchased land at Temangalo, Wakiso district and whether the seller of the land, Security Minister, Mr Amama Mbabazi, used his political power to force the fund into buying his land.
"As a matter of urgency, in order to reduce the current apprehension amongst the core stakeholders, that is, employers and workers," said a statement from the organisation issued on October 7, "major transaction like ALCON payments, Pension House design, Lubowa Project and the Health Insurance Scheme must be halted to await the establishment of a truly representative Board."
The statement quickly added that such actions must be accelerated in order not to stifle the Fund business. While halting pending investments might appear sound in line with FUE's rationale, the action is in fact illogical because the Fund would be constraining the growth of its assets, ultimately limiting the returns on members' savings from where it gets the interest its pays workers.
Among the projects the Fund is being asked to halt include a loan to URA and the Pensions Tower, both of which are high-yield investments that are expected to strengthen the fund's asset base.
FUE opposes government's control of NSSF's management which it views as responsible for the endless haemorrhage of workers savings in corrupt deals at the Fund. According to the NSSF Act 1985, the Board of Directors and senior management of the Fund are appointed by the line Minister.
Such a relationship though doesn't dovetail with the principles of corporate governance which require separation of powers and roles. "The Fund is exposed to excessive government control which we are opposed to."
The Minister of Finance Dr Ezra Suruma who is supposed to provide political oversight for the Fund is alleged to have exerted pressure on the NSSF MD Mr David Chandi Jamwa to buy the Temangalo land at Shs11 billion. The minister has however denied these allegations.
Dr Suruma and the Security Minister, Mr Amama Mbabazi are also alleged to have wanted the money to buy out their fellow shareholders in their National Bank of Commerce.
FUE also pressed their long-standing view that the pensions sector be liberalised as a measure to stimulate competition and efficiency in the management of workers' savings.
A competitive and dynamic environment, the statement said, would also mostly curb the chronic corruption at NSSF.
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