National Social Security Fund (NSSF) loan to Uganda Clays illegal-Uganda Retirement Benefits Regulatory Authority (URBRA)

Officials from the Uganda Retirement Benefits Regulatory Authority (URBRA) have informed the select committee probing the alleged mismanagement of National Social Security Fund (NSSF) that the Shs11 billion unsecured loan extended to Uganda Clays was illegal.

Martin Nsubuga said that the loan has been restructured adding that Uganda Clays has since handed over a land title to NSSF as security

On Wednesday, 08 February 2023, the committee learnt from NSSF management that the loan was disbursed to Uganda Clays in 2010 has not been repaid and has accumulated to Shs20 billion.

URBRA management appeared before the same committee on Thursday, 09 February 2023 and the Director Legal Services and Secretary to the Board, Rita Nansasi revealed that Section 68 of the URBRA Act restricts savers groups from extending loans to private companies. “It is illegal for NSSF to give loans to private companies,” she said.

According to the Auditor General’s report, the loan has been written off and the Committee Chairperson, Hon. Mwine Mpaka asked URBRA to provide details of individuals who sanctioned the decision.
“If you write off a loan, it means the company cannot make the money to pay it back. If you are writing it off, how are members’ funds protected? How did NSSF give a loan to a company that was making losses?” he asked.

The Chief Executive Officer (CEO) URBRA, Martin Nsubuga however, said that the loan has been restructured adding that Uganda Clays has since handed over a land title to NSSF as security. “We are aware that the loan has been written off but it does not mean its recovery has stopped. Our interest is to protect savers’ funds. URBRA performed an onsite visit and has demanded for a loan re-payment plan,” said Nsubuga.