The NSSF has responded to anonymous allegations of misconduct, asserting their commitment to transparency and cooperation with the Inspector General of Government's investigation while declaring the allegations false. Key highlights include investments in Umeme shares with significant appreciation, the sale of idle land at Namirembe, a joint venture's dissolution regarding a housing project, and a waiver for contributions defaulters to recover employee contributions. The statement also addresses staff training and performance management, as well as ongoing negotiations regarding a construction project for the National Farmers Federation.

1. PRESS STATEMENT
May 03, 2013
The Fund has received information relating to a report submitted by an anonymous individual
to the Inspector General of Government (IGG). The report contains a number of
unsubstantiated allegations against the Fund, which have been reported in the media today.
The Fund is open to any investigation by the IGG. We will provide the required information to
enable the IGG carry out investigations.
We commit, in line with transparency and accountability, to cooperate with the IGG to
conclusively investigate the allegations.
Nevertheless, we wish to clarify that these allegations are absolutely false and are intended
to tarnish the reputation of the Fund.
1. Buying of Umeme Shares
The Fund has purchased a total of 131.5 million shares in Umeme to date through the initial public
offering and secondary market transactions, resulting in an 8.1% holding of the total shares.
Our investment in Umeme was undertaken in line with our investment procedures and after a thorough
due diligence. The investment was approved at all levels of authority from management up to the
Minister of Finance, Planning and Economic Development. Currently, Umeme is trading at UGX 315, up
14.5% from the listing price.
With all the Fund’s trades in the secondary market executed at UGX 275, the Fund’s average purchase
price inclusive of trading fees is only UGX 276. The value of our investment has therefore appreciated by
UGX 5 billion in less than 6 months.
Umeme declared a dividend per share of UGX 15 for the year ending 31 December 2012, implying a
dividend yield of about 1.97 billion.
2. Disposal of land at Namirembe
This land was purchased in 2008 at UGX 650m, together with other plots in Ndeeba, Arua, Gulu, Hoima,
Mbarara and Masaka. The idea was to build branch offices countrywide. The Fund resolved to dispose of
all the plots as they were idle assets tying up money that would otherwise be earning income. This
resolution was adopted and approved by the Board of Directors.

2. The Namirembe land in question had no access road, a fact confirmed by the Commissioner for Surveys
& Mapping and which was not taken into account at the time of purchase in 2008 as boundaries were
not opened then. The impaired value on account of lack of access road has now been confirmed by the
Chief Government Valuer.
The Fund did not deem it necessary to apply for an access road because it was not intending to develop
the land, and the prospective buyer owned all the surrounding land [Plot 436], reason why PPDA
approved direct disposal to that bidder; furthermore, the Fund had by then already contractually
committed to sell the land to the buyer.
The land sale was authorized by PPDA, Contracts Committee, Accounting Officer and the Solicitor
General. The land was valued at UGX 600m by the Chief Government Valuer while the Fund sold it at
Shs. 650 Million. The hitherto locked up value of the land is now invested in income generating assets.
3. Joint Venture with SBI for planned housing estate at Lubowa
The Fund purchased over 563 acres of land at Lubowa, Kampala to develop a modern housing estate in
2003. In 2004, a Joint Venture company Victoria Properties Development Ltd, was formed to implement
the housing estate.
The JV was unfavourable to us because it made SBI a majority shareholder in the company yet NSSF was
to provide both the land and cash for the project. After a lengthy negotiation, SBI agreed to forego its
rights under the Joint venture agreement in exchange for the design and supervision contract without
competition. These JV dissolution terms were approved by the board of directors, Contracts Committee,
Management Investments Committee, PPDA, and the Solicitor General paving way for progress on the
project.
Designs have been completed and submitted to Wakiso District Council for approval to pave way for
construction. The US$ 1 million loan was to the joint venture, NOT SBI and the money was spent by the
joint venture company to prepare a master plan for the project. The guarantee SBI issued for 51% of the
loan expired and the JV Company was wound up. The loan was deemed a sunk cost and written off by
the NSSF Board of Directors.
Upon dissolution of the JV, the ownership of the Master Plan was transferred to NSSF, together with all
unspent balances on the JV bank account worth approximately Shs. 40 million.
The Fund is fighting encroachers on that land who include Pastor David Kyambadde and Hassan
Katamba of Resurrection Life Church and Mathias Jumba. A bailiff engaged by the Fund to evict the
encroachers was violently assaulted, injured and his vehicle destroyed .The matter has been handled by
office of the RDC, Police, DPP, and is due in court. Furthermore, a Surveyor from the Commissioner,
Surveys and Mapping has also been engaged to determine the extent of encroachment and identify all
encroachers on the land so that they are dealt with at one go.
4. Waivers to contributions defaulters
In 2011, the Fund launched an Amnesty and Whistleblowers campaign to encourage employers who
were defaulters to pay their employee’s NSSF contributions and in turn, the Fund would offer a waiver

3. of the penalty as provide for in the NSSF Act. A number of employers have responded and are paying the
arrears in installments, which has resulted into our increased monthly contribution rates.
URC was sued way back in 2008 by NSSF represented by Crane Advocates. After a protracted litigation
and lengthy audit, URC admitted it owed arrears being under remittance of standard contributions in
respect of its workers from 1995 to 2001 plus interest. URC agreed to pay on condition the penalty is
waived, and appealed through the Hon. Minister of Finance for a waiver. The penalty was 6 times the
value of the arrears. As part of our relationship model, a consent judgment was entered under which
the MD waived the penalty [NOT contributions] and asked URC to meet legal expenses, on condition the
Principal and interest are paid by 30th May 2013.
The first instalment of Shs. 3.89 billion has been remitted, and the lawyer’s fees paid off by URC. Bottom
line is workers contributions have been recovered by the lawyers at no cost to the fund. The case is still
pending in court for a portion of the arrears that URC disputes I.e. contribution arrears in respect of its
workers from 1995-2006 and is awaiting Judgment.
The “waivers of contributions” was a subject of a recent IGG investigation (report of 7th
March 2013);
where the IGG identified some very historical weaknesses in the controls and procedures and these
were immediately addressed. Though the IGG identified these weaknesses, it was also clearly
established that there were no personal gains or motives behind these lapses.
5. Staff issues and remuneration
The Fund has clear and empirical performance targets and a performance appraisal system. The
circumstances under which a member of staff may be let go due to poor performance are also very
clearly stipulated in the Staff Handbook (duly approved by the Board). At other times, a person may be
let go in response to business needs. NSSF closed 4 branches it was no longer tenable to have staff at
management level without branches to manage.
The Fund regularly conducts training as part of staff development. To date, 84% of all current staff have
been trained following the FUND’s staff TRAINING and development strategy.
The whistleblower alleges that the Fund paid UGX 11.4 million phone bill of the Corporation Secretary.
This is an office line, used for official communication. When roaming, the charges are substantially
higher due to the fact that the service providers charge incoming and outgoing voice and data. It is not
true that the handset is replaced “every 3 months.”
6. Land title for National Farmers Federation land
This was a BOOT agreement signed in 2008 for construction of a 12 storey building on the UNFF at Plot
27 Nakasero Road, Kampala. The cost of the project approx. US$12 Million would be provided by NSSF
and recovered from rent over a period of 25 years after which the property would be retransferred to
UNFF. UNFF appealed to NSSF to reconsider the investment and management has held a series of
meetings on an amicable dissolution. Management is verifying the costs of terminating the Joint
venture, including Stamp Duty, Rent and rates. KCC requires a valuation of the plot before advising on
the applicable rate. However, the title has no acreage indicated on it and therefore cannot be valued
until that matter is clarified.

4. RICHARD BYARUGABA
MANAGING DIRECRTOR