NSSF Savings – Prime Time Communications

Out to Lunch

#OutToLunch Uganda at 60: What if Uganda was a human being

#OutToLunch Uganda at 60: What if Uganda was a human being By Denis Jjuuko On Sunday, Uganda turned 60 years old having received its independence from the British on 9 October 1962. Had Uganda been a person, he would have received his full NSSF pay out five years earlier. If he worked in the Uganda public service, he would either be retired or on contract depending on the agency that employed him. He would have seen a few of his children graduate from university, start marriages and dropping off grandchildren over the weekend or as often as they needed a willing nanny at no pay! And like most Ugandans, he would be begging his children that haven’t given birth to hurry up so he could have a chance to see some of his grandchildren before he dies. And again like most Ugandans he would be considering relocating to his country home, leaving the city to the young and furious. Had he made some money, he would have set up a home somewhere else, and rent out the other house in preparation for retirement where once in a while he would invite friends for drinks and reminisce about the good old days. He would start a farm somewhere and plant a few trees. Build some rentals and join a few boards as a non-executive director. Life would be good. He would be proud of his accomplishments, the policies and project he initiated. And how they changed the world even though those achievements may be invisible to many others. He would be quick to mention where his children are especially those who live and work in London, Johannesburg or Boston, those practicing as doctors and engineers or on their post graduate courses in elite universities. But there is also a Ugandan who would be calling everyone they know right now, as he turns 60, and facing retirement contemplating on what to do to remain on the job. A letter to his superior to extend his stay on the job or copying the former Chief Justice by swearing an affidavit to lower his age would be on the cards. Another Ugandan would become captive to his children who are now his ‘retirement investment.’ The children will decide when he sees a doctor or whether the young offspring he got with his mistress would go to school. He would feel abandoned and terrified and only name dropping the bigwigs he used to chill out with in the cities but who no longer answer their phones whenever he calls pretending to be too busy. He would mention the flight to New York or Tokyo for a conference and how good life was in Toronto when he visited. Unable to buy waragi for his new friends, their attention would quickly turn to the young man preparing for his 2026 bid for parliament. He can after all buy beer. And for those below 60, parliament and elective office has become one of the most lucrative forms of employment competing at the same time with those who retired. If they don’t fight over votes in parliament to represent the country in the East African assembly, they are laying out strategies to become councilors at all levels. Not to be like their retiring parents, those in employment, spend all their time looking for every possible way to have rental income. Buildings are going up in all sorts of suburbs but on salaries that can barely pay school fees for just one child in an average school. Those who aren’t ‘lucky’ enough to be building rentals are surviving by the grace of God having mortgaged themselves to the bones. Salary advance is the order of the day. Those who had invested in businesses, Covid-19 disrupted their plans. The restructured loans have matured again and banks are foreclosing on them. As Uganda celebrates its 60th anniversary, 12,000 schools according to the government owned newspaper are on forced sale. It is plausible that in the next few years, nobody will be investing in schools anymore. So where will those who will be 60 in the year 2082 have studied? Without a functioning education system that is affordable for all, even the poorest of policies wouldn’t be put on the table for debate. There will be no debate actualy. Everyone will be for themselves. So if government wants to create impact for the next 60 years, it must start by fixing the education system—a catalyst for growth of all the other sectors. The writer is a communication and visibility consultant. djjuuko@gmail.com

October 25, 2022

Out to Lunch

#OutToLunch Why you don’t necessarily have to withdraw your NSSF 20% savings

#OutToLunch Why you don’t necessarily have to withdraw your NSSF 20% savings By Denis Jjuuko Finally, Ugandans who save their money with the National Social Security Fund (NSSF) can get at least 20% of their savings and interest as long as they are 45 years old and above and have saved for 10 years instead of waiting to access the money at the age of 55. I had argued in these pages that people should qualify for 50% not just 20% but where I come from, they say first get what you can as you bargain for more. Many people who get lumpsum payments usually lose it in a short time either in wrong investments or simply fail to manage the windfall. It may sound weird but many of those who will get the money need to be sensitized to invest it and NSSF should regularly organize such seminars. Of course the hardest people to advise are those who have just received a good sum of money. The main reason people lose money is because they aren’t used to it or they invest in stuff they have no idea of. You will hardly find a business that isn’t profitable on paper — all business plans show profitability at one stage. However, many of the people who qualify to get this money are still somewhere employed and they could go slow in starting businesses. In Uganda, there is an overpromotion of self-employment as the only pathway to untold wealth. This narrative is misleading. There are employed Ugandans whose income is much more than what many business owners will ever make in a lifetime. Most self-employed Ugandans are hustlers — struggling to make ends meet on a daily basis and are usually one illness away from total financial apocalypse. They work longer hours without any holidays. Actually, for them, if they don’t work, they won’t eat. Raising capital is expensive and difficult. Taxes, rent, and the cost of doing business take way the little that they would have saved. Getting customers and contracts is difficult and payments sometimes take time. It may sound glamorous to mention yourself as a CEO, director or self-employed but many times what matters is what one takes home. So if you are 45 and qualify for the 20%, you don’t necessarily need to do anything with this money. You don’t have to withdraw it so that you start a business which you may not even have time to supervise in a week because of your job elsewhere. If you don’t have a business already, it takes on average five years to master it— establishing useful supplier contacts, understanding the customers, clients getting to know you and the tricks involved in running the enterprise. Many of the money used as start up capital in many cases is lost. Businesses in the earlier stages of their establishment largely survive on the founder’s tenacity. That is why many businesses that are started in Uganda don’t celebrate their fifth birthday. I know many people who have lost money by trying to start up side businesses or side hustles as we call them. So the beauty of the 20% midterm access to NSSF money is that you can get it any time as long as you are 45 years old and above and have saved with the fund for 10 years. There is no timeframe when you can access it. So if your idea is to start a business, first “chill” touching the NSSF money. Raise money through other means such as saving a certain percentage of your salary and start the business. Once the business is established and you have learned the intricacies of running it, you can withdraw the NSSF money and invest it in the business. That way you have to an extent firewalled yourself against losing this lumpsum payment. And where you invest it should be more than what NSSF is giving you as interest. Currently, NSSF is giving 12.5% annually as interest. So if you are withdrawing the money to invest it, the business should be able to give you more than 12.5% a year as net profit otherwise it makes no business sense to hustle and earn less than what you would earn from NSSF while doing nothing. The biggest problem with NSSF was inability to withdraw any money until age 55. Now that this is out of the way, NSSF earnings could be your ‘side hustle’ if you are above 45 years old. The writer is a communication and visibility consultant. djjuuko@gmail.com

March 18, 2022