NSSF Declares 13.5% Interest for Savers — What It Means for Kampala and Uganda

Kampala, Uganda — September 22, 2025

The National Social Security Fund (NSSF) has announced a 13.5% interest rate for its members for the financial year 2024/2025, marking the highest return in several years.

This announcement was made during the Fund’s Annual General Meeting (AGM) held in Kampala. Over 2.3 million members are expected to benefit from this payout.

Key Figures & Drivers

Metric Figure / Detail

Interest rate declared 13.5% annually
Number of members impacted ~2.3 million
Money to be credited to member accounts Over Shs 2.5 trillion – up from Shs 2 trillion last year
Previous years’ rates 11.5% last year; ~10% before that
Inflation, economic context Inflation ~5% — meaning savers will still enjoy a positive real return despite economic headwinds.

Why the Jump?

NSSF officials attribute this higher rate to several positive developments:

1. Strong investment performance across multiple asset classes — fixed income, equities, real estate.
2. Improved compliance by employers (better remittances, fewer lapses) which increases the inflow of contributions.
3. Diversification of the Fund’s portfolio, which helps cushion against risk and volatility in individual sectors.

What It Means for Savers in Kampala & Beyond

Kampala residents with formal employment stand to gain significantly, as many contributions and interest payouts will be processed through Kampala-based employers and banks. The extra payout can help with rising living costs in the city.

Informal sector & rural areas: While these groups may be less represented in formal employment, NSSF is also pushing voluntary savings platforms which could allow more people outside formal jobs to benefit. It’s called “Smart‑Life Flexi”

Real value: Even though the inflation rate (~5%) eats into returns, a 13.5% interest rate still gives savers a healthy real return. It helps retain the value of savings rather than letting inflation erode gains.

Voluntary Savings & Youth Outreach

In a related development, NSSF has also highlighted the success of its Smart‑Life Flexi platform, a voluntary savings option. Over the last four months, 15,000 Ugandans joined this platform, contributing about Shs 7.2 billion. The platform offers up to 13% interest per year.

This is particularly relevant for young people and those in informal employment – groups traditionally less covered by mandatory social security schemes. The outreach included university career expos and financial literacy campaigns.

Challenges & Risks

While the declaration and associated performance are very positive, there are a few caution points:

Inflation pressure: If inflation rises sharply, real returns could erode. Savers will expect NSSF to maintain or improve performance to stay ahead of rising costs.

Currency risk & economic shocks: Uganda is exposed to external shocks (imported inflation, forex fluctuations); real estate and equities markets can be volatile.

Governance & transparency: Public scrutiny remains high over how NSSF invests funds, how overheads are managed, and how accessible the Fund is to people outside formal sectors.

Looking Forward

NSSF’s performance positions it among the top retirement/savings funds in East Africa. A 13.5% interest rate is well above many regional counterparts.

The success of the voluntary savings paths like Smart‑Life Flexi suggests that expanding coverage outside formal employment is becoming feasible.

For Kampala & Uganda broadly, such returns can encourage a culture of saving, reduce dependency on informal savings or risky financial products, and help cushion citizens from economic instability.