Big Interview: Richard Byarugaba on life, being wealthy and managing NSSF

Richard Byarugaba is the chief executive officer of the National Social Security Fund arguably the hottest seat in Uganda financial sector. He has held a number of senior positions in various banks.
He shared with us his life journey and his take on what we can do to turn around the current poor economic situation.
Excerpts below:

You were listed in 2012 as one of the wealthiest individuals in Uganda. Were you surprised?
I don’t know where they get that from but I have been working for a while, for 40 years. I worked in Uganda, I worked in London. I worked as an expatriate, I worked as CEO in many places. So I suppose I have got reasonable wealth but I am not sure whether I am one of the wealthiest. Certainly I do have a bed to sleep on and I have got food.
How does that make you feel to be placed in such positions?
I cannot believe it because I know what the real situation is. I would say that we have got to thank God, we have been blessed. We have been around for a little while. We have been successful in the things we have done, especially in terms of work. As I said I have always had senior positions which meant that I had good salaries. I have been fugal in the way I spent my money and the way I invested my money. I am also lucky that I know where to invest money. I have good reasonable knowledge on how to invest my money and that has been quite useful.
What is embedded in the story of your rise to your success. Would you say it is the one that relates to ordinary Ugandans?
I think it is. My parents were ordinary Ugandans. My father was a civil servant. My mother was a housewife and she continues to be a housewife. My father is deceased. We came from a little village in Mbarara and we went to ordinary schools. I got an ordinary degree and started to do my work in the banks. So it is a story of an ordinary chap who was lucky to have found the ability to navigate difficult situations that existed especially during the 70s and 80s until the turbulent times. I survived and then walked on to get some reasonably good jobs and then I ended up at NSSF. So, it is a journey of success but it is also a journey of an ordinary person. It is not too difficult to come from poverty and get to the levels we have been at.
Can you point to a mark in your upbringing that you believe has been attributed to the person you have become today?
I think it is a curiosity. I always say that I went to two schools. The first school was sort of a catholic based school, a school which was very regimental, very disciplinarian, very prayerful and that regime prepares for discipline that I believe helped me to get where I am. Second part is when I went to Ntare and that was a secular school. There was no religion and basically you are left on your own. It also allowed you to innovate and create. So I have these two personalities whereby one personality is the very structured, rigid individual and the other side of me is very creative, free spirited.
You are a banker, business executive, entrepreneur. Those three distinguish areas. What one of those speaks to your success, your profession, or passion.
I started off in school doing maths. I love maths and art. So the maths side was the regimental side of things and the art side was the creative side of things. So when I finished university, I then started working in the bank and the bank is very regimental, it is very disciplined. I recall there were about 10 staff that joined at the same time in 1983. That was quite a long time ago and only the two of us managed to survive. A lot of our colleagues left because of things that were not palatable to the bank and they had to be terminated. That is one of the reasons why I learnt something about money. Money that you see in the bank, money that you see in the workplace is not your money, the only money that is yours is the money that is in your bank account. And that has been a very good lesson if you think about it. That was my passion.
In terms of my passion, my passion is around getting things done, my passion is about getting accolades after having succeeded and really making things look good.
 
What highlights can you pick from your career that illustrate your financial management skills?
There are very many, I will give you three. The first one is when I was at Standard Chartered Bank. The bank had only one branch and was struggling with increasing our market share. An opportunity occurred and we took on the challenge of buying a bank that was going under so I got involved in that. I bought the assets, I bought the building and the places. I think that integration of that business was quite a very good experience. The second was what to do with the Nile Bank. It had been threatened with closure by the central bank. They were given a period of six months. They hired me from Standard Chartered Bank initially as general manager and eventually as CEO. We moved from three branches to 23 branch operations which we then sold to Barclays at the time which is Absa today. I believe that was a very good success story. We were the first bank to start mobile banking as it is currently used today.
 
There is a perception you left financial institutions where you worked in a much worse state than you found them. What can you say about that?
Let’s start off with Standard Chartered Bank. I left Standard Chartered Bank in 2000, it is still doing well now. I went to the Nile Bank and it was in a very bad situation. We turned it around and we sold it to Barclays which is today Absa. Absa is in a very good position. The next one is Global Trust Bank which I started and I left in 2010. It was in good shape when I left. I think it locked its doors to its customers. Actually, it was acquired by DFCU maybe five years later. I was out there for over five years; I don’t think you can blame that on me. Now I am at NSSF and the story of NSSF still continues.
Is it true that without some of your strategic connections, you would not be where you are today?
Networks are made through good work. I am sure that if you were not a good performer, I don’t think you can keep good networks. I agree I have definitely been able to establish very good networks which have allowed me to perform very well, so I can’t deny that.
 
Would you consider being at the helm of NSSF as the height of your career?
I never thought about it in that way. I have progressed through my career. My ambition at the age of about 29 ,30 was to run a bank with a turnover of $ 50 million. I achieved that at Nile Bank and therefore that could have been my career high. NSSF is definitely a big institution. We have invested in all the asset classes in Uganda. We have got about 40% of government debts, we have got about 80% of stock exchange in Uganda. We have got about 2000 hectares of land in and around Kampala and we have got a couple of commercial buildings. We have got a very big portfolio in the East Africa region, specifically in Kenya. We have got about Shs 2 trillion worth of investment in Kenyan market. We have got about Shs 1.5 trillion worth of investments in the Tanzanian market. So NSSF is quite big. When I joined NSSF it was the smallest in the region, today we are the biggest pension fund in the region in terms of assets and management. It is definitely a good part of my CV whether it is the highest in my career, I think time will tell.
 
Why were you opposed to the passing on the midterm access bill?
My view was that I knew the numbers, nobody else in this country knew the numbers as well as I did. Only 20% of our customers have any other formal savings apart from NSSF. The average amount of money we pay out to our members when they retire at the age of 55 is around Shs 17 million. The average time a member keeps their lump sum payment is two years after they have received the money from us. It points to the fact that Ugandans don’t save enough. Ugandans don’t utilise their money well after retirement. 60% of our members, when they get their money from NSSF,  utilize it to finish a house. I therefore felt that if a member is already disadvantaged in the current situation, what will happen if you allow them to withdraw 20% of their money at the age of 45? What will happen to them when they are 55? I was looking at it from the point of view that a member is already disadvantaged and these short term benefits will disadvantage them further in the future. I
 
From your experience, how best can this country be managed economically considering the budget deficit and limited resource basket among others.
There are two tools that governments have everywhere in the world, you have got monetary policy and fiscal policy. The fiscal policy is run by Uganda Revenue Authority and the monetary policy is run by Bank of Uganda. Uganda’s problem today is around inflation. That inflation is an external shock that has created it. The external shocks are two, the first one is disruptions to our supplies created by the war in Ukraine and Russia and the problems are at the ports in China, Beijing and all those coming out of Covid-19. The pandemic itself did disrupt supplies and therefore you have seen a rise in the cost of imported goods which has led to external inflation.