The Fund’s financial performance was negatively impacted by varying external factors outside its control.

The financial year presented challenges in terms of the sudden weakening of the Ugandan shilling and the increase in the rate of inflation which resulted in the Central Bank increasing interest rates.

The enactment of the NSSF Amendment Act 2022, enabling midterm access for qualifying members, influenced a change to the Fund’s traditional long-term investment strategy in 10-year government bonds, which would have enabled the Fund to take advantage of the rise in interest rates into shorter term investments with lower returns. This ensured the Fund had sufficient liquidity to respond to requests for midterm access.

The stock markets also performed badly in the region, largely due to global disruptions caused by the Covid-19 pandemic, disruption to supply chains causing delays in delivery of goods required to expand capacity and operating environment for companies in Uganda. The war in Ukraine also impacted inflation, which led to Central Banks responding by increasing their base rates, resulting in institutional investors who dominate the stock exchange in East Africa moving away from the region and taking advantage of higher yields in other countries.

All of these factors resulted in the Fund losing value from investment in stocks, depreciation of the Ugandan currency and the inability to take advantage of higher yields from long-term investments.