Graft reigns at Kenya, Ugandas NSSF Written by PHILLIP NABYAMA & CEDRIC LUMITI THE BUSINESS WEEK Saturday, 30 August 2008 KAMPALA/NAIROBI Uganda and Kenya are neighbours with a great deal of similarity. The similarity in question is not the pattern of the economies, size of cabinet or numbers of the general population but troubles that have put the National Social Security Fund (NSSF) in either country under the spotlight. Ugandas NSSF has provided fodder for the media with prominent stories and longer airplay on radio and television over the last fortnight following revelations that a ritzy amount of members (over 300,000 members save with NSSF) savings had been used to procure land in a manner not up to scratch with corporate governance. The media had hitherto largely reported positively about NSSF Uganda. The twists and turns on the NSSF Uganda land saga now being probed by Parliament are so frequent that some stakeholders have lost track of events. NSSF bought 109.22 acres of land from Arma Ltd, a company closely linked to Ugandas security minister, Mr. Amama Mbabazi, and another 302.39 acres from wealthy city businessman, Mr. Amos Nzeyi at Temangalo in the central district of Wakiso at Ush11 billion. The land was originally valued at Ush14m, Ush16.6m and Ush18m per acre respectively by three independent surveying firms that were ironically contracted by NSSF. They put the acreage at 414.34. Mbabazi, it was revealed transferred ownership of his land to Nzeyi through his company, Arma Limited but payment of the land was made in the ministers name. Available information also shows that the NSSF board advised Mbabazi on how to conceal his ownership of part of the land to avoid conflict of interest and that some of the land that the NSSF paid for did not actually exist- while the fund paid for 463.87 acres, it had actually been assigned 490.47 acres according to local media. NSSF managing director, Mr. Chandi Jamwa and board chair, Mr. Edward Gaamuwa are having a difficult time explaining to legislators how they paid out Ush24m per acre, for the land, a large difference from what the hired surveyors estimated. "I felt from the bottom of my heart that it was improper to deal with a cabinet minister in such business because we had visited a neighbouring country where a similar incident had happened and the Fund had been put on a lot of political pressure. I looked at the situation as similar to what we would have gone through," Mr. Claudius Olweny, a board member opposed to the deal was quoted by the media as telling the legislators. It is anticipated that Mbabazi and finance minister, Dr. Ezra Suruma would individually be summoned by Parliament. The latter is expected to explain why he, as supervising minister approved NSSF to go ahead with the land transaction. Unlike Kenya, the supervision of the NSSF in Uganda was in 2005 moved from the labour ministry to that of finance by President Yoweri Museveni amid protests from sections of different stakeholders. In a related development, Kenya's labour minister, Mr. John Munyes last week announced management changes at the troubled NSSF Kenya. The changes have seen the sacking of the managing trustee, Ms. Rachael Lumbasyo in what the minister termed as ''a complete overhaul' aimed at re-establishing the fund to meet its economic mandate. Lumbasyo who has been Board of Trustee Chair for the last couple of years has been sent on compulsory leave. "We want to empower NSSF to meet its mandate and stop it from being a cash-cow it has been through out the years. We have established the root of the problem and more changes are on the way," said Munyes. The minister immediately appointed Fred Rabongo to replace Lumbasyo, in what analysts in Nairobi said was a positive move for the fund that has faced financial and management challenges for the last couple of years. Munyes said the shakeup was aimed at flushing out cartels at the Ministry whom he said were responsible for numerous court cases the worker's body has been facing in recent times. Lumbasyo's term was due to end in November but the Minister said the move was aimed at protecting the Ksh82 billion portfolio, which he claims has been grossly mismanaged. He has also put on notice the staff at the Ministry saying he is launching a new bid to clean up an apparent mess there.