I have never ever met Jamwa alone â€" Suruma

Oct 09, 2008

NSSF managing director Chandi Jamwa has recently coersion and undue influence by the Finance and Security ministers in sanctioning the Temangalo land deal. Here is the Finance minister, Ezra Suruma's response.

Ezra Suruma

THERE are four major allegations of wrongdoing in the NSSF Temangalo land investment that I wish to clarify.

That I forced the Board and Management of NSSF to buy land against the interests of the NSSF
1. I want to say that I agreed with the Chairman of the Board and the Managing Director on a five Year Corporate Plan. In that plan we agreed that the NSSF would invest in three main areas:
  • long-term bonds,

  • Equities (that is shares of companies)

  • and real estate that is land and buildings).

  • 2.The individual projects in all these categories were to be initiated and have always been initiated by the NSSF and brought to the minister seeking his opinion on the individual projects.
    When projects are submitted I try to see if they fall in these agreed categories. If they have no obvious fault I generally write to the chairman to say that I have no objection. This consultation over investments is required by Section 30 of the NSSF Act, 1986.

    3.The claim that the minister forced the NSSF is totally untrue because it was NSSF which brought the project with many others, including five other lands, for the minister to give a “no objection.” I have never made an appointment to meet the Managing Director anywhere outside my office and I have never met him alone. I have always met him in my office with the Chairman of the Board and an adviser or officer from my office.

    The one time that I saw him at Munyonyo during the Warid opening concert was purely accidental. It was not a planned meeting. I was accompanied by my wife during a break in the concert and I happened to see him sitting alone at a table outside the Commonwealth complex.

    I greeted him and talked to him briefly while my spouse was away. Afterwards she returned and we went back to the show. It is outrageous to suggest that I arranged the meeting at Munyonyo to discuss any official business with him at the concert. I had no idea he was going to be there.

    That the purchase was made in order to benefit the National Bank of Commerce where the Minister is a shareholder.

    4. I do not have a significant number of shares in the National Bank of Commerce. Management of NBC have informed me that my shares have had a book value of sh13.28m since 1997. I have not received any benefit from any sales or purchases of shares that have taken place there since that time.

    Nor do I have money to buy significant purchases of shares. I of course support the NBC being one of the 280 founder members of that bank. But it is not true that I have ever done any unethical act in order to help the bank.
    5. As far as I know the bank is sound and has not been in any special need for capital. Its financial statements are published in the media at least once a year as required by law. So any interested person can check and see its true financial condition.

    Not only is the bank well capitalised but it even declared a dividend recently, a distribution of profit to shareholders recently. Bank of Uganda would certainly not allow them to pay dividends if they did not have enough capital. They would have forced them to retain the earnings in order to increase the capital. This means that the buying and selling of shares among shareholders in the bank should not be mixed up with the financial health of the bank.

    The buying and selling of shares among shareholders can be done leaving the total capital of the bank unchanged. The buying and selling of shares by some of the shareholders has not affected my shareholding. It has left me exactly as I was.

    That the price at which the land was bought was too high

    6. Considerable discussion has taken place on this matter. All I can say is that I have never participated in any discussion of the price of Temangalo land or any other land submitted by the fund. Many lands were proposed for purchase. I approved all of them.
    I have never commented on land prices or sizes. That is the work of management and the Board. This ministry does not have the capacity to go into operational matters of the Fund. This would probably breed even more corruption.

    That the Minister of Finance appointed his business partners to the Board of NSSF and used them to carry out corrupt deals


    7. This is in regard to an organization called Uganda Agency for Development (UGAFODE) where Mr Gamuwa, Ms Joyce Acigwa and myself have served as directors since that charity was founded in the 1990s.
    This is a microfinance organisation which was formed by Bishop Dr. Edward Muhima (who is now Bishop of North Kigezi) to help the poor. He invited a number of Christians, including ourselves, to serve as directors and promoters. It is not for profit. It depends largely on grants for capital. We ourselves have never paid for any shares.
    We have simply contributed our time and expertise to assist the poor. It is therefore wrong to talk about business partners since it is not a business for profit. All earnings made by the organisation are used to increase the number of people who can access loans.

    8. Recently, it was registered as a company limited by shares, instead of a company limited by guarantee. The reason for the change is that we would like to turn it into a deposit taking institution. This would enable it to obtain loan funds from depositors instead of depending on grants alone.

    NSSF Investments
    9.According to the NSSF Act, “All monies in the fund, including the reserve account, which are not for the time being required to be applied for the purpose of the fund shall be invested in such investments as may be determined by the Board in consultation with the Minister” (NSSF ACT, 1986. Section 30). In accordance with this section, the Board has been consulting me on their:
  • Five-year Corporate Strategic Plan

  • Their annual investment plans and budgets

  • And their project and portfolio investment plans.


  • 10.As I have already indicated, during discussions on various occasions in my office, we agreed to spread risks among various types of investments namely bonds, equities and real estate.

    Subsequently, they have written or sought audience from time to time seeking my opinion on proposed investments, I have written back and sometimes met the Chairman and the Managing Director, giving my opinion on their proposed investments. This is my understanding and conduct of “consultation” as provided for in the law.

    11. Additionally, I have also advised them, during the meetings and in writing, to reduce costs and to restructure that institution gradually so as not to destabilise the institution.

    Profitability of NSSF

    12.This has been my role and I believe it has been effective because the activities of the Fund have been highly profitable during the last four years that I have been in the Ministry. The assets of the fund have also risen remarkably to over shs one trillion during the same period.

    13.While a critical finger can be pointed at a particular transaction, objectively speaking, there has been a great improvement in the overall profitability of the fund since this Board and Management took over. However, the ideal arrangement in my view is to pass the new law and then appoint a Pensions Regulator as soon as possible. We have already distributed the proposed law (Bill) to stakeholders for discussion and comments.

    Future of the NSSF in the Financial Sector

    14. During colonial days Ugandans were virtually excluded from the financial Sector. Currently, the NSSF is the only major indigenous financial institution with significant resources. As we debate its operations and its future we should bear in mind that there are intense interests in its assets and in entering the pension sector.

    We in the Ministry of Finance believe we have done all that we can to strengthen the financial condition of the Fund and to propose reforms in the pensions sector. Although the Ministry of Finance cannot be above criticism, it is a fact that we have improved the financial strength and profitability of the NSSF significantly since it came under our mandate. I am sorry that the problems of Temangalo have spoiled our excellent record of performance.

    15. People of Uganda: do not throw out the baby with the bath water. Let us use the current problems to change and ensure a better and stronger Social Security Fund.
    We are looking forward to the time, hopefully soon, when NSSF will be transferred to an independent pensions regulator for closer supervision, better management and even more profitability.

    Perhaps the never ending cycles of hiring and firing of Board and Management which has been the pattern at NSSF for the last 20 years can be brought to an end through appropriate reforms.

    I appeal to you all to support this reform so that we can strengthen social security in Uganda. This, in my view is the best way forward. I thank you.

    For God and my Country

    Dr. E. Suruma,
    Minister of Finance, Planning and Economic Development

    (adsbygoogle = window.adsbygoogle || []).push({});