NSSF encounters Shs589 billion setback in target growth

In the period ended March, according to financial results released yesterday, the Fund posted lower growth in the size of the Fund compared to the targeted growth. Although the Fund reported an expansion in total assets at 7.6 per cent from Shs16.86 trillion to Shs18.14 trillion in the period, it said growth suffered.

According to the results report, growth was 2 per cent lower than projected owing to unrealised foreign exchange losses worth Shs562.6 billion and equity losses worth Shs35.8 billion, both totalling Shs598 billion in losses.

“We have posted unrealised losses of Shs598b for the period ended March. This is a combination of FX (foreign exchange) loss(es) of Shs562.6b mainly driven by the depreciation of the KES [Kenya shilling] and capital losses of Shs35.8b from our equity investments,” notes published along the financial results indicated.

Between 2020 and January 2023, the Kenya Shilling has been volatile against major currencies, experiencing a 25 per cent decline against the dollar in that period. It also exhibited a weak stance against the Uganda Shilling closing at Ksh27.45 yesterday compared to Ksh29 in January 2022.

NSSF earnings performance

NSSF generates 78 per cent of its earnings from fixed income, 15 per cent from equities, and seven per cent in real estate. It noted that high yields in government securities across East Africa returned an impressive growth in interest income.

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The interest income, which makes up 98 per cent of total Fund income, grew by 14 per cent from Shs1.336 trillion to Shs1.522 trillion, due to increased investment in government bonds in the region.

However, NSSF reported a decline in dividend income, which as of December 2022 fell to Shs56.8 billion compared to Shs67.7 billion in the same period in 2021.