National Social Security Fund (NSSF) had a successful year in terms of dividend income, with MTN and other key investments contributing significantly to its earnings. According to the Fund’s annual report, NSSF earned UGX 31 billion from its 8.84 percent stake in MTN for the fiscal year ending June 2023. This marked a substantial increase from the UGX 9.3 billion earned in the previous fiscal year.
The report also highlighted other top earners for NSSF during the same period, including Safaricom, Equity Group Holding, CRDB Tanzania, and National Microfinance Bank.
NSSF’s substantial stake in MTN, which is the second largest shareholder in the company, was particularly lucrative due to MTN’s strong financial performance. MTN reported profits of Shs409 billion for the fiscal year ending 2022, contributing to NSSF’s earnings.
Additionally, NSSF reported dividend income of UGX 19 billion from Equity Group Holding, an increase from UGX 14.1 billion, and earnings of UGX 16.1 billion, UGX 14 billion, and UGX 10.6 billion from Safaricom, CRDB Tanzania, and National Microfinance Bank, respectively.
NSSF’s investment portfolio includes a significant allocation to equities, accounting for 12.51 percent of its investments. The majority of its investments, 78.4 percent, are in fixed income, while real estate makes up 9.01 percent.
During the fiscal year ending June, NSSF reported a 15.11 percent increase in revenue from fixed income investments, reaching UGX 2.2 trillion. Dividend income also saw significant growth, increasing by 45.42 percent to UGX 145.12 billion, making it the Fund’s fastest-growing income source. However, income from real estate showed a slight decrease to Shs11.94 billion, while revenue from fixed income rose to UGX 2.04 trillion.
Notably, fixed income investments remain the largest source of revenue for NSSF, accounting for 13.57 percent growth.
NSSF’s strategic investments in cross-border equities in East Africa paid off, with all 10 invested companies returning dividends for the fiscal year ending June 2023. The Fund received 41.32 percent of its total dividend income from investments outside Uganda, with only MTN representing Uganda among the top five dividend contributors.
Financial markets analysts, such as Mr. Andrew Mwiima, noted that the Uganda Securities Exchange has fewer listed companies and less liquidity compared to other markets like the Nairobi Securities Exchange. This situation is due to institutional investors dominating the market by holding over 50 percent of shares in local firms.
Mr. Martin Nsubuga, the Uganda Retirement Benefits Regulatory Authority CEO, added that many companies on the Uganda Securities Exchange have not been performing well, causing investors to seek alternative opportunities in more robust markets like Kenya. He emphasized the importance of managing investment risks in equities.
