Despite and enlargement of the formal sector and a huge number of the working population of between 17-19 million, the National Social Security Fund (NSSF) contribution by employers towards their employees saving is still low and it stands at only 51 % from only 1.3 million people yet the law compels the employers to contribute.
This was revealed by the minister of Gender, Labour and Social Development Betty Among while addressing journalist at Uganda Media Centre in Kampala on January 11, 2023. The minister said that employers are still holding about UGX 200 billion in outstanding contributions.
Among said that the compliance rate is only 51% and a huge percentage of the formal employers don’t remit the funds yet they deduct it when paying their employees leaving a gap of 49% of the non-remitted funds to NSSF.
She said by December,2022 a total of 420 cases were reported by the whistle blowers to NSSF and in January, 2022 a total of 213 cases were in court while over other 20 individuals also committed NSSF to court for failure to compel their employers to remit their contribution. They are seeking NSSF to pay this contribution.
“I am going now to embark on cracking down the errant employers who deduct funds from their employees and fail to remit them to NSSF because this is theft and such employers need to be prosecuted.’’ Among vowed.
She added on, “ I have also tasked the NSSF board to examine the strategic areas of the workers we can talk to in the informal sector to see that they begin saving with such a fund and also to create an online system which can be used by whistle blowers such that when they report they do not lose their jobs.
She further said the new law that the president assented to in 2022 will help to widen the sector because it allows even firms with below 5 employees also to contribute as well as people in the informal sector like market vendors, Bodaboda riders and Tax operators can also voluntarily save with the NSSF.
Among also said that 48% of the total employers in the country have five or more employees and that her emphasis will be on targeting the other 52% as well as the informal sector such that the pool can increase.
She also said that NSSF is tasked and directed to target an increase in coverage from the current 1.3 million members to 5 million in the next five years and to 15 million workers by the year 2025.
According to the Uganda Buruea of Statistics (UBOS) census,75% of the total employers are in the informal sector and if all these are mobilized as the new allows the NSSF funds will grow very huge.
The minister also said her ministry is still facing a challenge of limited labour officers who are mandated to supervise the compliancy country wide the number she says is still very small.
Meanwhile the minister of Finance Planning and Economic development Matia Kasaija who also address journalist in the same press conference argued Ugandans to embrace a culture of saving with the local saving schemes such as NSSF because this will help to grow the pool of local funding and save government from borrowing externally which is very costly.
By George Bukenya