KAMPALA –The country’s Retirement Benefits Regulatory Authority – URBRA officials told the parliament’s select committee probing the alleged mismanagement of National Social Security Fund -NSSF on Thursday that the Ugx11b unsecured loan, which the Fund extended to Uganda Clays was illegal.
The committee had on Wednesday learnt from NSSF management that the loan – that was disbursed to Uganda Clays in 2010 has not been repaid – accumulating up to Ugx20b.
But when the URBRA management appeared before the same committee on Thursday – its Director Legal Services and Secretary to the Board, Rita Nansasi revealed that Section 68 of the URBRA Act restricted 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, 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.
URBRA CEO, Martin Nsubuga however, said that the loan has been restructured – adding that Uganda Clays had 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,” revealed Nsubuga.
This prompted Mwine Mpaka to inquire whether the land title given as security was equivalent to the loan amount to which, Nsubuga responded that no valuation had been performed on the land.
“What is making you comfortable that all is well? Is the land from Uganda Clays worth the loan,” wondered Mwine Mpaka.
Karim Masaba – the MP Industrial Division, Mbale City, however, cast doubt on the possibility of the said loan recovery – saying URBRA report had indicated NSSF’s credit losses at Ugx3b.
“According to what you have presented to us, the balance on loans is Ugx3b. This means the Ugx11b loan will not be recovered unless Uganda Clays decides to pay it back out of goodwill,” insinuated Masaba.
The legislators also criticised URBRA for failing to address a petition by the National Organisation of Trade Unions – NOTU on alleged illegal NSSF board representation.
NOTU petitioned URBRA accusing the Secretary General of the Central Organisation of Free Trade Unions – COFT, Dr Sam Lyomoki of self-nomination to the NSSF board.
“The Minister of Finance wrote to URBRA requesting for vetting of nominees to the Board. URBRA vetted Lyomoki who nominated himself. URBRA confirmed the same person who nominated himself and the minister acted on URBRA’s advice,” said Mwine Mpaka.
Nsubuga however, said that the petition was received two weeks ago after Board members had been vetted.
“We did not have the petition at the time of assessment of nominees. When we received the petition, we informed this committee that investigations are being undertaken,” he said.
Nsubuga’s response compelled Richard Gafabusa – the Bwamba County MP to reveal that URBRA had received the petition on September 10 2021.
“This is a letter with your stamp indicating received; is there another URBRA we are interfacing with? Is there another petition apart from this one?” asked Gafabusa.