Uganda has registered significant strides in the different social development sectors such as health and education, which have translated into increased life expectancy.
10 months ago .
Significant strides in the pensions sector
Uganda has registered significant strides in the different social development sectors such as health and education, which have translated into increased life expectancy.

Over the last 58 years, Uganda has registered significant strides in the different social development sectors such as health and education which have translated into increased life expectancy.

With a life expectancy of 62.5 years (World Bank 2017) and rising, Ugandans are living longer in retirement, and therefore, the growing need for social security schemes to avert old age poverty.  

Currently, as shown in the latest Uganda Retirement Benefits Sector Outlook (2019) by the Uganda Retirement Benefits Regulatory Authority (URBRA), there is a total of 66 mandatory and voluntary schemes in the country down from the 67 in 2018.

The segregated supplementary voluntary occupational schemes constitute the majority of the schemes at 51. The sector has also grown in terms of asset base currently boasting of over sh13 trillion compared to sh11 trillion in 2018.

This constitutes 10.3% of the country's GDP hence an important aspect of the country's economic portfolio. For a long time, the public service pension scheme remained the most prominent pension scheme and yet this covers an average of 350,000 workers. This, therefore, meant that majority of the population was left without any form of social security after retirement.

The National Social Security Fund (NSSF) created in 1985 by an Act of Parliament has since revolutionarised the sector, providing the much needed social security for workers in the private sector. The fund paid out a total of 450b in 2019 to it's beneficiaries with age-related payouts (30%) taking the largest share.


In 2015, government undertook an initiative to reduce vulnerability among older persons outside the formal pension schemes such as the Public Service Pension Scheme and the NSSF by introducing the Senior Citizens Grant under the Social Assistance Grants for Empowerment (SAGE).

From 15 pilot districts, older persons aged 80 years and above across the country receive a monthly grant of sh25,000 to help them access basics. The Government allocation to the programme has increased tremendously from sh9b (£1.9m) in 2015/16 to sh62.88b in 2019/20; and sh107.5b in 2020/21.

This is a graduation of the programme from a largely development partner-funded to domestic funding covering the largest share of the cost. It is also argued that domestically funded programmes have high chances of survival, scale up and are likely to responsive to the specific country-needs.

Beatrice Okillan, the policy and advocacy co-ordinator, at the Expanding Social Protection Programme, Ministry of Gender, Labour and Social Development, says the Government recognises the issues that concern older persons, and the Senior Citizens Grant is one way the state is taking responsibility.

Studies by both government agencies and independent institutions have shown that the citizens grant among other things not only benefits the individual recipient but entire households and indeed communities.

A 2018 Quantitative Impact Analysis of the Senior Citizens Grant by Bjorn Gelder and Diloá Bailey-athias shows that the programme has had significant positive implications on the different indicators such as the log of household expenditure per adult equivalent; the poverty headcount rate; and the poverty gap.

"The SCG had a statistically significant impact on household expenditure, a key proxy for overall living standards. The magnitude of the effect is large: our models indicate that the SCG increased expenditure per adult equivalent by 33% on average." reads the report.

The study further showed that the SCG had a statistically significant effect on households' wealth index score, with an average improvement of 0.04 standard deviations. The number of mobile phones owned by household members went up by about 0.1 phones on average (which represents a relative increase of 15%).

Patrick Kiconco Katabaazi, a social protection expert and public policy analyst argues that, "While the pension sector in Uganda is promising, the products in the market are still limited and do not effectively address the retirement challenges. There is need for NSSF and other schemes to transition from the provident fund arrangement to pension schemes where beneficiaries can access periodic pay when they qualify."

According to Katabaazi, there should be deliberate efforts to increase coverage of the pension schemes. This is critical in ensuring that people participate in securing their old age during their productive years than passing the burden to the tax payer. Social Protection, a core component of the Sustainable Development Goals (SDGs), is critical in protecting and preventing people from falling into poverty or sinking deeper into poverty.  

Some of the elderly in a meeting. The Government increased SAGE funding to sh107.5b in 2020/21

Direct and indirect social protection interventions help build resilience of the population to withstand shocks such as the coronavirus pandemic that has disrupted economies globally.

Uganda has since developed a National Social Protection Policy which lays out the different strategies to ensure a life-cycle approach to social protection. A life-cycle approach to social protection provides for protecting populations against contingencies along the life-cycle i.e children, youth, adults and old-age.

Pensions are at the tail-end of the social protection system and a failure at the different stages of the life-cycle i.e; childhood and adulthood leads a huge financial burden for the tax-payer when the population retires.

It is, therefore, important that there is a system approach for everyone to appreciate their role in securing old age and this is what Uganda should be doing at 58years. With only 16% of the working population covered under some kind of retirement benefit arrangement, a lot more needs to be done to secure Ugandans from old-age poverty.


Flavia Kabahenda Rwabuhoro, the Advocacy Advisor at the Uganda Parliamentary Forum on Social Protection stresses the need to have interventions as spelt out in the NSSF Policy (2015) practical.).

"It is high time we have a Social Protection law enacted for enforceability. COVID-19 has shown us the critical gaps in our social protection system but also highlighted the opportunities in the communities that we can build on," she says.

Kabahenda emphasises the country needs to rethink it's responses to old age security from a reactionary to a more productive approach. There should be well functioning social safety nets which are inclusive, timely and regular.