In a recent update provided ahead of the National Social Security Fund (NSSF) annual members’ meeting this week, Mr. Patrick Ayota, the NSSF managing director, unveiled an ambitious plan to grow the fund’s size to 20 trillion Shillings by June 2024, a year earlier than originally projected.
While the initial target was to achieve this milestone by 2025, Mr. Ayota emphasized the strategic importance of reaching 20 trillion Shillings in assets under management sooner. This projection implies a minimum growth of Shs 1.5 trillion, taking the fund from Shs 18.56 trillion as of June 2023 to the new target.
“Based on the Fund’s performance in the 2022/23 financial year, we anticipate reaching the strategic goal of Shs 20 trillion in assets by June 2024, one year ahead of our initial schedule,” Mr. Ayota stated.
However, it’s worth noting that the increase in assets during the period ending June 2023 was Shs 1.32 trillion, falling slightly short of the Shs1.5 trillion required to reach the Shs2 0 trillion mark.
Despite these efforts, NSSF has been actively implementing various initiatives to bolster its membership, both mandatory and voluntary. Additionally, the Fund is projected to experience growth in revenue from investments in areas such as equities and real estate, which increased by Shs 326 billion from Shs 1.87 trillion to Shs 2.2 trillion during the period ending June 2023.
Nevertheless, Mr. Ayota cautioned that while the Fund’s performance remains robust and profitable, it still falls short of desired levels. He emphasized the need to ensure the fund’s long-term sustainability.
Under Vision 2035, a key component of NSSF’s long-term strategy is to grow assets under management to Shs 50 trillion, with a coverage target of at least 50 percent of the working population.
Mr. Gerald Paul Kasaato, the NSSF chief investment officer and acting deputy managing director, highlighted the Fund’s diversified investments, including holdings in companies like Safaricom in Kenya. He also noted investments in government debt and blue-chip companies in Tanzania and Rwanda.
Currently, 12.51 percent of NSSF’s investments are in equities, 9.01 percent in real estate, and the largest portion, 78.48 percent, is invested in fixed income.