How a tiny minority of trade unionists have used politics to wrest control from the majority of the fund’s subscribers.
In his
State of the Nation address, President Yoweri Museveni said government
was going to borrow money from the National Social Security Fund (NSSF)
to finance infrastructure development. Later, the Chairman of the
Uganda Investment Authority, Patrick Bitature, said government should
do so without consulting workers. Since then, Bitature has been under
attack.
If, just
for argument’s sake, government has to seek consent from workers before
it borrows from NSSF, how should this happen? Should it call a
referendum of all workers, use workers’ representatives in Parliament or
have representatives of workers’ take a majority on the NSSF board
which makes investment decisions? The first option is perhaps too
complicated. The second is less attractive since workers’ MPs already
have too many legislative responsibilities to keep a close eye on the
workings of the Fund. Therefore, the third option seems the best. And
that option is already in place right now.
Out of the
current ten members of the board, workers have five directly elected
representatives. In fact, the current chairman of the board, Ivan
Kyayonka, is a subscriber to NSSF and holds the second largest stock of
savings in the Fund at over Shs 760m. Kyayonka is also board chairman
of Shell Uganda. The other member is the NSSF Managing Director,
Richard Byarugaba. He is the largest subscriber with the Fund, holding
about Shs 870m worth of savings. Given the size of their savings, these
two have the greatest stake in the Fund’s operations; its failure
would make them lose more than anyone of us. Therefore, out of ten
board members, seven are workers.
The third
and fourth members of the board are the Permanent Secretary in the
Ministry of Finance, Planning and Economic Development, Chris Kasami;
and the Permanent Secretary in the Ministry of Gender, Christine
Guwatunde Kintu. They are not subscribers to the Fund but represent the
government, which manages NSSF on our behalf. The government of Uganda,
regardless of its fiddling with elections, is an elected government
that is responsive to pressures from mobilized demand-groups.
Workers
contribute only five percent of their salary; employers contribute 10
percent of their own money towards their workers savings. Yet employers
have only one person on the board. Given that most employers are
investors and therefore know investments with a good rate of return,
they should have been given more say in how the Fund invests the savings
of their employees. But democracy, where the majority decides, has
enthroned ignorance perhaps because we have a lot of it.
Workers’
representatives on the board are elected by the unions through a
democratic process. The problem is that of the 450,000 subscribers of
the Fund, workers’ unions contribute only 47,000 employees (11 percent).
Over 400,000 of the other subscribers (89 percent) are not unionized
and hence not represented on the board. Secondly, out of NSSF’s total
annual collections, employees from workers’ unions contribute only five
percent; non-unionized workers, 95 percent. This tiny unionized
minority, because it is organized and therefore able to make noise by
petitioning the president, controls 50 percent of the board. That hurts.
But it also subverts democracy.
Who are
these five eminent men and women whom the democratic process has thrust
onto the NSSF board? How competent are they to guide the Fund when
making long term investments? The fund has to decide a portfolio mix of
whether to invest in stocks (and there are different types), precious
metals, fixed deposit accounts in banks and real estate (different types
as well). This means that the board has to have members with wide
knowledge of investments in different sectors that give good yields over
time.
Do the
current workers’ representatives on the NSSF board have such profile to
guide the Fund? One of the members, Agnes Kunihira, is a stenographer
in RVR – the company that runs our railways. She has a diploma in adult
education. The other member, Musa Okello, is a custodian at Makerere
University. He has a certificate. The third workers’ representative is
Henry Mukasa. He used to work as a record keeper in Sugar Company of
Uganda Limited (SCOUL)’s sugar plantation. The fourth, Chritopher
Kuhirita, has a certificate in meteorology, done in 1962. And the fifth,
Richard Bigirwa, used to be in charge of laundry at Sheraton Hotel in
Kampala.
If this is
what democracy brings for those of us who save with the Fund, then we
are better off without it. There was an attempt to reduce the number of
workers’ representatives when the current board was being appointed.
The president rejected this saying he did not want to have a war with
workers’ unions. Clearly, the decision to have such people on the board
was influenced by politics rather than professional considerations. I
am personally sick and tired of this so called democracy in Uganda. For
fear of the unions, the president is not ready to fight for workers.
Workers
who want to be consulted before government can borrow their savings from
NSSF also have their money held as deposits in commercial banks. Yet
they are not demanding to be consulted when commercial banks lend their
deposits to government. The attraction to government control of sectors
of the economy is not simply ideological or a result of self
interested motives by those within the state. It has become apparent to
me that state control is attractive because it gives every Tom, Dick
and Harry a sense of power over decision making. It is out of a desire
for a sense of power (egotism) that NSSF is held hostage. If we became
less egotistical, perhaps we would get better returns.
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