Kampala, Uganda | NOW THEN DIGITAL — National Social Security Fund (NSSF) recorded substantial earnings from its MTN shareholding in the 2022/23 financial year, as disclosed in the Fund’s annual report. The report highlights NSSF’s top-performing investments, with MTN, Safaricom, Equity Group Holding, CRDB Tanzania, and National Microfinance Bank standing out as the leading contributors to dividend income.
During this period, NSSF’s income from its MTN shareholding increased to Shs31 billion, a significant rise from the Shs9.3 billion earned in the previous fiscal year. NSSF is the second-largest shareholder in MTN, holding an 8.84 percent stake, and benefited from MTN’s impressive annual profit of Shs409 billion.
In addition to MTN, NSSF reported increased dividend income from Equity Group Holding, Safaricom, CRDB Tanzania, and National Microfinance Bank, amounting to Shs19 billion, Shs16.1 billion, Shs14 billion, and Shs10.6 billion, respectively.
NSSF strategically allocates approximately 12.51 percent of its investments to equities, encompassing stocks and securities. The majority of its investments, 78.4 percent, are in fixed income, while 9.01 percent is in real estate.
For the year ending in June, NSSF reported a 15.11 percent rise in revenue, primarily driven by fixed income investments, which surged from Shs1.9 trillion to Shs2.2 trillion. Dividend income also saw substantial growth, increasing by 45.42 percent to Shs145.12 billion, surpassing other investment vehicles.
While income from real estate experienced a slight dip to Shs11.94 billion from Shs11.97 billion, revenue from fixed income investments climbed to Shs2.04 trillion from Shs1.8 trillion. Fixed income investments remain NSSF’s largest revenue source, growing by 13.57 percent.
NSSF’s strategic approach extends to cross-border equities, with investments in at least 10 companies in East Africa, all of which generated dividends in the fiscal year ending in June 2023. Notably, four of the top five contributors to dividend income are from outside Uganda, accounting for 41.32 percent of the Fund’s total dividend income.
MTN is the sole Ugandan company among the top five contributors, with the others being Equity Group Holdings, Safaricom, CRDB Tanzania, and National Microfinance Bank.
Financial markets analyst Mr. Andrew Mwiima pointed out that the Uganda Securities Exchange, in comparison to markets like the Nairobi Securities Exchange, is relatively less active, mainly due to the limited number of listed companies and dominance by institutional investors. He emphasized the importance of diversifying investments to manage market risks.
Mr. Martin Nsubuga, CEO of the Uganda Retirement Benefits Regulatory Authority, noted that underperforming companies on the Uganda Securities Exchange have deterred investors, prompting them to seek alternatives. He emphasized the significance of choosing investments that have growth potential.
