27 Apr 2017

PENSION SAVING FOR THE INFORMAL SECTOR

PENSION SAVING FOR THE INFORMAL SECTOR

When one thinks of pension saving in Uganda there mind will not be far from thinking about the National Social Security Fund (NSSF).

NSSF for long has been focused to pension savings of people in the public sector under formal employment focus is changing however to also include pension savings made by the private and informal sector as individuals in this sector are free to voluntarily make contributions to NSSF.

Contributions made can be at a minimum fee individual are comfortable contributing monthly.

When one thinks of pension saving in Uganda there mind will not be far from thinking about the National Social Security Fund (NSSF).

NSSF for long has been focused to pension savings of people in the public sector

Relevant arrangements have been put in place to incorporate private individuals as remarked by Mr. Stevens Mwanje head of Sales of NSSF.

 In a related event to The Uganda Retirements Benefits Regulatory Authority URBRA established under the Uganda Retirement Benefits Act 2016 awarded licences to Mazima Voluntary Individual Retirement Benefits Scheme (MVIRBS) and Kampala City Traders Association (KACITA) Retirements Benefits Scheme ON 3RD March 2017; the country’s first informal sector-based pension schemes after several months of legal review.

This will extend social protection coverage to the majority of Ugandan workers faced with inadequate social welfare coverage.

Several employers and employees in the informal sector lack proper hiring procedures, stable savings channels and reliable business records. Employees in the formal sector enjoy access to internal and external savings schemes.

An estimated two to three million Ugandan workers are covered by private pension schemes, the National Social Security Fund (NSSF) and the Public Service Pension Fund out of 15 million employed Ugandans, official data shows.

While some informal sector players earn considerable incomes every year, absence of stable revenue streams and low innovation appetite among fund managers is partly blamed for poor pension benefits coverage in the sector. Uganda’s informal sector accounts for 60 per cent of GDP and nearly 50 per cent of available jobs, government data shows.

Whereas membership to MVIRBS is open to anybody engaged in the informal sector, enrolment in KACITA retirement benefits scheme is restricted to members of the country’s most prominent trade lobby group that boasts of more than 1,000 members spread countrywide.

Member contributions to MVIRBS have been set at a minimum of Ush2,000 ($0.59) per day and a minimum of Ush10,000 ($2.9) per week for interested persons while registration fees have been fixed at Ush10,000 ($2.9) per person. Many local savings and credit co-operative organisations (Saccos) offer low income members monthly contribution rates of less than Ush20,000 ($5.9) that stimulate steady collection patterns and smooth lending operations.

MVIRBS said it has already accumulated initial contributions of Ush10 million ($2,925) from about 300 members and plans to grow its membership to 50,000 people over three years.

Do you agree that it is high time people in private and informal sector started saving up for retirement?

Do you feel that the informal sector will be complaint to the new developments?

 

05 Apr 2017

MSME GARAGE WEEKLY NEWSFEED

MSME GARAGE WEEKLY NEWSFEED

E-commerce, commonly known as online business has not only propelled global trade but as well as local trade. Many people in Uganda are now involved in online business but succeeding in this business needs you to have constant update of perfect market information.

 

We therefore give you an insight of economic changes that will guide your investment decisions today.

 

Commercial Banks Rates

 

Interest rate: lending rates is currently at 22.37%

                    Time deposit rate is currently at 11.76%

 

Inflation rate: food inflation is currently at 18.8% but headline inflation still stands at 6.7%

 

Exchange rates: Buying            Selling

U.S dollar           3607.63           3617.63

GBP                    4478.51           4490.92

Euro                    3879.14           3889.89

K.SH                       34.99               35.09

  1. SH                        1.61                 1.62

 

Commodities: prices expected to increase further due to the falling currency as shillings depreciates

 

Trade minister:  Minister Amelia Ann Kyambade on Wednesday launched QNET absolute living in   Uganda and called for more investors to extend their business to Uganda.

 

National: Government urged to revise taxes levied on smart phones to hasten Internet access

               Government launches multi-billion market in jinja district to boost fisheries

               Multi-million Nakaseke juice plant fails to start as more industrialization demand continues

 

Foreign: Netherlands invest 22 million euroes in Uganda to boost Agro-exports

              Korean government extends support of 900 million U.S dollars to modernize agriculture

World:  Europe markets lower, south Africa exposed stocks slump, EU offers pre-Brexit trade talks

 

For more local, national and international business news, visit our website on www.msmegarage.org