What is your assessment of the pension industry in Uganda compared to Kenya and possibly Zambia?
Ideally, if you look at the coverage of the retirement’s benefits schemes in Kenya, Uganda and Zambia, the coverage is much higher in Uganda compared to the other two countries. This is attributed to NSSF which is mandatory and with higher contributions.
The type of benefit provided to the employee in terms of retirement is higher in Uganda than in Kenya and Zambia because NSSF requires that everybody must save 5% and the employer must match with 10%. That means that, in everybody’s salary, there is a 15% deduction.
In Kenya, on everybody’s salary, there is a US$$4 deduction: US$2 for an employee and US$2 for an employer. It’s a small amount of money. In Zambia, it’s the maximum of 5%; 2.5% employee and 2.5% employer. The benefit that somebody carries home in Uganda is higher than the benefit that someone carries home in Zambia and Kenya.
If we focus on coverage, Kenya ranks highest than the other two countries simply because of the smaller contributions in NSSF in Kenya. Most private companies have set up pension schemes for their employees or have joined Umbrella pension funds or they have joined personal pension plans so you find that we have many more employees covered in terms of contribution and savings for retirement, but the contributions may not be as high as they are in Uganda.
The challenge of having a state scheme that drives the industry is the fact that it…