NSSF Hi-Innovator and how schemes can create their future

Savings Digest - Issue 3

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Esteemed Readers,

When social security or pension schemes mature, panic sets in. According to the American Academy of Actuaries, this happens when the obligations of a social security or pension services provider become larger compared to its source of contributions (in short, what the provider is giving out is much more than what they are getting).

Several factors account for this, but the most widely cited is a combination of increasing benefit payouts, an ageing membership, and a stagnant job market.

In Uganda and most of Africa, our social security and pension schemes should not have to worry about this problem because the population is younger. For instance, about 50% of NSSF Uganda’s membership is below 35 years. In addition, according to the Uganda National Population and Housing Census 2024, about half of the population is under 18 years old.

Experts advise that the best way to mitigate the problem is to start addressing the challenge before it crops up, that is, before the social security or pension plan becomes mature.

This brings us to the NSSF Hi-Innovator programme, which is fast becoming a model on how social security or pension schemes are turning to unorthodox means, counting on the entrepreneurial class to mitigate maturity risks. This programme, now in its sixth year, has provided valuable lessons.  When they get support through seed funding, entrepreneurship training, and business development support, start-ups and small and growing businesses can go a long way in supplementing government efforts at job creation.

The evidence cannot be ignored. Over 430 small and growing businesses have accessed seed funding, and over 81,000 people have benefited from financial and entrepreneurship training in the Hi-Innovator programme. Critically, it has led to the creation of over 202,000 direct and indirect jobs.

Replicated over many years, could this “unorthodox” intervention, thanks to the Mastercard Foundation and NSSF Uganda, be the catalyst the innovation ecosystem needs to spur job growth? Could such interventions form a foundation, upon which the country’s entrepreneurs, who mostly face the dilemma of expensive credit, can realise their dreams one step at a time?

We attempt to examine these questions in this issue of the Savings Digest by providing deeper insights into the NSSF Hi-Innovator programme, through interviews with experts, testimonials from entrepreneurs, and features. We also provide market updates, and other features from your favourite writers. We hope you will be informed and encouraged through these pieces.

Victor Karamagi

Editor