- Background
On April 23, 2026, the Undersecretary of the South Sudan National Ministry of Labour issued Public Circular Number 5/2026, which sought to annul Circular Number 03/2010. The latter mandated employers to accrue and manage social insurance benefits. Although the new circular does not explicitly reference any specific provisions of the law, it is believed to have been issued under the National Social Insurance Fund Act of 2023 (NSIF Act). This raises questions about whether the omission was merely an oversight or indicative of a potential lack of authority, particularly to the Undersecretary, in the legal framework. While this is not a matter for scrutiny in this discussion, what remains the fact is that there is a circular number 5/2026 out there.
As it stands, the circular directs employers to deduct and remit social insurance benefits directly to the National Social Insurance Fund (NSIF or the Fund) on a monthly basis. Under typical circumstances, particularly in an environment where a robust regulatory framework and independent, accountable institutions are in place, both employers and employees would be well-informed about the nature of social insurance. In such a context, essential procedural steps would be thoroughly established, in turn enabling the government to make no particular effort in ensuring the remittance of social insurance benefits to the NSIF. This is particularly true given that the objectives of social insurance—to support beneficiaries or the insured in maintaining a basic standard of living during retirement, unemployment, or disability—are inherently appealing.
- What then is the problem with the Circular No. 5/2026
Since its announcement, Circular No. 5/2026 has sparked an intriguing debate among employers and employees in the private sector, as well as national and international organizations, including United Nations agencies. This reaction is understandable given the sensitivity surrounding social insurance benefits. However, the spontaneous and vigorous nature of the discussion raises curiosity, and for good reason. It is this curiosity that compels a closer examination of the NSIF Act to determine if there are legitimate grounds for concern.
As noted by the Honourable Undersecretary of the Ministry of Labour, the NSIF Act came into effect on December 21, 2023, following presidential assent. Under section 3, the Act’s primary objective is to establish a national social insurance scheme for employees in the private sector, including non-governmental organizations. Additionally, it outlines the formation of the NSIF, along with its Board of Trustees and Executive Management (section 9). The Act also details the recruitment process and the requisite qualifications for these positions. From Circular No. 5/2026, it appears that all necessary steps have been taken and that relevant parties are on board. However, the precise manner in which these actions were carried out, and whether they aligned with the spirit of the law, remains unclear. Such uncertainties contribute to the prevailing hesitance surrounding the issue.
An in-depth analysis of the National Social Insurance Fund (NSIF) Act reveals critical, non-negotiable procedural requirements embedded in its provisions. Foremost among these is the imperative registration of both employers and employees, which is a prerequisite for discussing the accrual and remittance of social insurance benefits. For example, Section 25 mandates that employers must complete their registration and subsequently obtain a registration certificate. It is upon this foundational registration that the employees of these employers will also be registered and issued with distinct social insurance numbers.
These procedural steps are not merely advisable; they are obligatory, underscoring the importance of compliance prior to engaging in any discussions regarding remittance as dictated by the Act. Subsection (3) of Section 26 clarifies and reinforces the necessity of prior registration, stipulating that it is only one month following the successful completion of the employer and employee registration that they are recognized as “contributors” to the Fund, in accordance with Section 26 (2). Thus, remittance of social insurance benefits can only commence after this period.
It is noteworthy that, as of now, no employers or employees have been registered under the NSIF Act or issued the requisite registration certificates or unique social insurance numbers. The significance of Sections 25 and 26 is manifold: their compliance is essential for initiating the process of accrual and subsequent remittance of social insurance benefits, and they also enshrine the legal principle that contributions made prior to the NSIF Act 2023, and before the appropriate registration under Section 26 (2), are ineligible for remittance to the Fund.
The insistence on adherence to registration protocols as stipulated under the NSIF Act prior to a designated cut-off date is deliberate, aligning with the established principle that no legislation operates retroactively. Consequently, any registration or collection of social insurance benefits that occurred under the auspices of the Ministry of Labour, or through alternative legal frameworks preceding the NSIF Act 2023, cannot be assimilated into the Fund. Therefore, even if the registration processes delineated in the NSIF Act were completed expeditiously, any accruals established under Circular 03/20210 would remain non-remittable to the Fund. The Fund must commence its operations de novo.
Any assumption of prior registration can only be deemed a fallacy, fundamentally at odds with the provisions and processes laid out in the NSIF Act 2023. Consequently, before any discussions on remittance—such as those suggested by Circular 5/2026—can be substantively addressed, there must be unequivocal fulfillment of the mandates outlined in Sections 25 and 26 of the NSIF Act 2023. Neglecting to do so would constitute a legal contrivance, comparable to the proverbial “putting the cart before the horse,” rendering any such efforts a nonstarter from a legal perspective.
Equally significant is the need for education and awareness among both employers and employees regarding the implications of the National Social Insurance Fund (NSIF) Act of 2023. This foundational step is imperative and should precede the processes of registering employees and assigning unique social insurance numbers. Given the NSIF Act represents a novel legal framework, it is crucial to cultivate a comprehensive understanding among employers and prospective beneficiaries. Stakeholders must be informed about the nature of social insurance, the registration procedures involved, the potential benefits of remitting their contributions to the NSIF, and the safeguards implemented to ensure the appropriate management of these funds. Additionally, they should be aware of the procedures for accessing their contributions when required, among other pertinent inquiries.
Of considerable concern is the conspicuous absence of enabling regulations to facilitate the NSIF Act’s implementation. Several stipulations within the Act fail to delineate essential steps that would address beneficiaries’ apprehension. Rather, these provisions indicate a need for the establishment of regulations that would render the Act operational. For example, Section 65 explicitly states the necessity of regulations for the disbursal of benefits under the NSIF Act. Furthermore, Section 109 emphasizes the Minister’s responsibility to formulate regulations that ensure the “effective and efficient” implementation of the Act’s provisions. This implies that any endeavor to hastily operationalize the Act, without the requisite regulatory framework, is likely to result in failure and could indeed reflect a bad-faith effort.
Particularly concerning are certain provisions that disproportionately affect beneficiaries who are of advanced age at the inception of the Fund’s establishment. For instance, Section 42 mandates a precondition of 180 monthly contributions to qualify for retirement pension benefits. Such stipulations significantly disadvantage older individuals who are compelled to contribute to the Fund, especially considering the imminent nature of their retirement. The urgency to remit their contributions, juxtaposed with the reality of their impending retirement, raises critical questions about the equitable treatment of their rights.
- Conclusion and recommendations
The skepticism surrounding the current legal framework, particularly the National Social Insurance Fund (NSIF) Act 2023, characterized by the absence of enabling regulations and the ambiguous processes related to the establishment and operationalization of the NSIF Board of Trustees and Executive management, has fostered apprehension among both employees and employers.
As deduced from the analysis presented, while the enactment of the NSIF Act represents a commendable advancement from a policy standpoint, the mere existence of principal legislation is insufficient to facilitate the accrual and remittance of social insurance benefits. Although the implementation of such benefits is a necessary step, it is contingent upon the completion of fundamental preliminary actions. The appointment of the Board of Trustees and the executive management of the National Social Insurance Fund must adhere to the stipulations of the law’s intent, ensuring that appointees possess the requisite professional experience pertinent to the management of social security funds. It is imperative to evaluate whether these criteria have been satisfied. Furthermore, individuals previously associated with the administration of failed schemes must be scrutinized and disqualified, aligning with the provisions of Section 12(6) of the Act. Section 36 underscores the necessity for the managing director of the Fund to be selected through a competitive process.
Assuming these procedural steps were indeed undertaken—a premise that appears unsubstantiated—it remains crucial to question whether the registration of employers and employees has been executed by “the Board,” as mandated by Section 25 of the Act. This step is pivotal, as highlighted in Section 26(3), which stipulates that employers and employees are deemed “contributors” to the Fund only one-month post-registration in accordance with Section 26(2). Given the prevailing circumstances, it is likely that these registrations have not occurred, thus delaying the accrual and subsequent remittance sought by Circular Number 5/2026 until the foundational elements of the NSIF Act are fulfilled.
In light of the necessity to adhere to the spirit of the NSIF Act 2023, the following recommendations are proposed:
1. Circular Number 5/2026 appears to be premature, as critical mandatory preliminary steps essential for the remittance of social insurance benefits to the Fund remain incomplete. Therefore, a corrective circular should be issued that preserves Circular Number 3/2010 until all outstanding mandatory preliminary actions are addressed. This extension will afford the Ministry of Labour a timeframe of approximately 3 to 5 years to methodically undertake the necessary steps.
2. Registration of employers and employees in accordance with Sections 25 and 26 of the NSIF Act should commence without delay. This registration must be conducted meticulously to mitigate potential errors that could incur significant costs for the Fund and its beneficiaries.
3. Following the registration process, efforts to educate and raise awareness among members should be implemented immediately. This initiative will facilitate a comprehensive understanding of the NSIF Act’s significance, thereby promoting smoother operationalization.
4. There should be an initiation and adoption of the necessary pending regulations for the effective and efficient implementation of the NSIF Act.
5. Also, of significant importance is the experience of the Board of Trustees and the executive management. Thus, it is crucial that the executive management and Board of Trustees members be mentored in best practices pertaining to the management of social insurance funds, thereby enhancing their capabilities in this critical domain.
The writer, Riek James Doar, is a South Sudanese advocate and can be reached at rjdoar@gmail.com.
The views expressed in ‘opinion’ articles published by Radio Tamazuj are solely those of the writer. The veracity of any claims made is the responsibility of the author, not Radio Tamazuj.
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