Ugandan MPs demand safeguards for savers' money in NSSF's Shs180b Marriott hotel
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Parliament's COSASE committee has told the National Social Security Fund to guarantee that workers' savings are protected after the fund put about Shs180 billion into a Marriott-branded hotel in Nsambya, questioning the valuation behind the deal.
Members of Parliament have directed the National Social Security Fund (NSSF) to guarantee that workers' savings remain secure following the fund's decision to inject approximately Shs180 billion into the development of a Marriott-branded hotel in Nsambya, Kampala.
The directive was issued during a session of Parliament's Committee on Commissions, Statutory Authorities and State Enterprises (COSASE), chaired by Muwada Nkunyingi. Lawmakers questioned NSSF management on the financial prudence and expected returns of acquiring a 30 percent stake in CS Hospitality, the entity behind the hotel project; the remaining 70 percent is held by local businessman Ponsiano Ngabirano, the proprietor of Capital Shoppers.
Nkunyingi said the committee had received petitions from savers worried about the safety of their money. NSSF managing director Patrick Ayota said the transaction went through layers of approval, starting with the Money Banking Investment Committee, then the board's investment department and the full board, before submission to the minister and review of the contracts by the Attorney General.
Defending the deal as a high-yield strategic real estate investment, Ayota said technical assessments factored in expected tourism cash flows and facility growth, and put the market valuation of the hotel at $200 million once completed. He said the fund holds two of five directorships, has veto powers over certain aspects of how the hotel operates, and that changing the operator would require at least a 75 percent board vote.
Buzaaya County MP Martin Muzaale questioned whether NSSF had conducted an adequate market survey, arguing the price did not offer a useful comparison with established five-star properties in Kampala. The scrutiny prompted COSASE to widen its investigation into the fund's wider hospitality portfolio, including its 2007 acquisition of a 20 percent stake in TPS (U) Limited, the operators of the Kampala Serena Hotel, bought for $1.95 million at the time.
The committee also revisited NSSF's Temangalo land purchase. The fund bought 463.87 acres in 2008 from Arma Limited and Amos Nzeyi for Shs11 billion, but 45 acres remain occupied by Nzeyi despite NSSF holding the titles.