CHRISTIAN APPOLOS writes on the milestones reached by the Nigeria Social Insurance Trust Fund (NSITF) in its efforts to provide adequate compensation to Nigerian workers through the Employees Compensation Scheme (ECS) and the hurdles it has had to scale.
Although the Nigeria Social Insurance Trust Fund (NSITF) metamorphosed from the National Provident Fund (established in 1961), to a Trust Fund (in 1993, by decree No.37) and to a Social Insurance Trust Fund (via the enactment of the Employees’ Compensation Act (ECA) by the National Assembly, on December 17, 2010), the provision for workplace safety net and social security for workers has been a core mandate of the agency.
First, the signing of the Employees’ Compensation Act (ECA) into law by the National Assembly brought fundamental restructuring to the fund. The Act mandates the NSITF to provide adequate compensation and rehabilitation to all employees and their registered beneficiaries in case of injuries, death, occupational diseases or disabilities that occur in the workplace or in the course of work.
The ECA further empowers the NSITF to maintain a solvent compensation fund for employees and employers and charged it to establish an efficient procedure for the enforcement of occupational safety and health standards to prevent workplace accidents. And in 2014, the amended Pension Reform Act of 2014 further directed the NSITF, in Section 84(2), to provide social security services to all eligible Nigerians.
Today, the NSITF, according to its Managing Director, Barr. Maureen Allagoa, has achieved a milestone in the discharge of its statutory mandate of providing adequate compensation and rehabilitation to Nigerian workers and their registered beneficiaries who have sustained injuries, occupational diseases, disabilities or died in the course of work.
She also stated that the fund, between July 2011, when the ECA came into operation and 2024, has registered over 145,000 employers and 7.4 million employees into the scheme, paid claims and compensation to over 103,000 beneficiaries, including 111 persons who received artificial limbs (prosthetics) and 11 beneficiaries who were sent abroad for further medical treatment.
Allagoa added that the fund has spent about N6.6 billion within the period and has taken occupational safety and health (OSH) training to workers in over 25,000 registered companies.
Also, NSITF, as part of its efforts to spread the coverage of the Employees Compensation Scheme (ECS) across the country, expanded its branches to 56 across 12 regions in the country.
The fund equally has two subsidiaries: a Trust Fund Pension and Pro-Health HMO. The Trust Fund manages retirement savings and pensions, while the Pro-Health HMO, a public-private-driven enterprise, provides healthcare insurance services to registered workers. It also has developed an operational plan with 50 objectives to boost ECS in line with the eight-point agenda of President Bola Tinubu’s administration in the areas of poverty alleviation and economic growth.
Meanwhile, through the efforts of the current management of the fund, the Secretary to the Government of the Federation, Senator George Akume, revealed that he has, in a circular dated September 22, 2023, directed all the Federal Government’s ministries, departments and agencies (MDAs) to commence the mandatory contributions of one percent of the emoluments of all public servants to the Employees’ Compensation Scheme of the NSITF. This is following the decision of the Extraordinary Session of the Federal Executive Council under President Buhari, which had on Monday, May 15, 2023, given the approval for the statutory one percent deduction.
According to the circular, the Minister of Finance is directed to “deduct the contributions from source and remit same to the NSITF for the payment of claims and compensations to deserving beneficiaries for death, injury, disease or disability sustained in the course of duty as provided in the Employees’ Compensation Act, 2010, Act No. 13.” It further directed all MDAs to “ensure strict compliance with the circular.”
Furthermore, management made further inroads recently by getting the nod of many Federal Government-owned institutions, state governments and private sector organisations and institutions that now implement ECS and Occupational Safety and Health (OSH). Notable among the states are Akwa Ibom, Kano, Lagos, Plateau, Abia, Rivers, Sokoto, Delta, and especially Bauchi, Oyo and Yobe which have enrolled. The management has also relaxed the time frame for capturing an accident victim to a reasonable period of time.
Moreover, the fund has, in the past one year, conducted 5,592 Occupational Safety and Health exercises in different workplaces across the country. The General Manager, Corporate Affairs of the Fund, Nwachukwu Godson, confirmed:
“Some of the major workplaces where the exercises were conducted are Schulmberger, Port Harcourt; Julius Berger Construction Company, Abuja; Dangote Cement Bagging and Packaging, Lokoja; Sundry Food, Rivers State; Shellberg Manufacturing, Lagos; Federal Palace Hotel, Victoria Island, Lagos State, among other hundreds in informal sector and small scale companies,” he added.
In addition, the fund’s many successes in recent years, Allagoa said: “We are embarking on an expansion policy, adopting the branch-in-branch strategy with Lagos region as a pilot while also creating service delivery centres across the country to further bring our services to all Nigerians using Bonny Service Delivery Centre as a pilot.
“We will expand our operations and coverage into the informal sector and other unreached areas in dire need of social security services. In addition to reaching more clients, this will reduce commuting distance for staff on compliance drive.”
On challenges, the fund noted that defaulting in the payment of the mandatory one percent contribution for ECS comes top, among others. In a recent presentation in Abuja, the fund added that government MDAs are chief culprits in this regard.
The Fund stated: “There are challenges which have encumbered the fulfillment of our mandate among which is the implementation of the deduction of 40 percent of the employers’ contribution to the fund by the Ministry of Finance as an operating surplus under the premise of the implementation of the Fiscal Responsibility Act.
“N1.4bn was deducted in 2022 and paid into the Consolidated Revenue Fund (CRF) in line with the Finance Act 2020. This is notwithstanding the fact that the NSITF is not a revenue generating agency but a tripartite structure holding funds in trust for the benefit of employees under the ECS and has no operating surplus.
“The NSITF is not treasury-funded and does not draw from the Consolidated Revenue Fund of the federation. Also, ECA 2010 does not cover some areas of claims and compensation in the informal sector and these gaps in the law have variously been exploited by dubious employers to the detriment of employees. Amendment to the Act is therefore needed.
“Another hurdle is implementation of the recent FEC approval and subsequent issuance of a circular by the Office of the Secretary to the Government of the Federation for the deduction at source, of the one percent ECS contributions for all workers in the public service of the federation and the retrieval of backlog from 2012 to date.
“Though the implementation of the ECS in all MDAs has received support from relevant quarters of authority, it further needs concerted efforts to ensure that contribution will begin this year. The fund needs the assistance of the Attorney General of the Federation for a fiat to prosecute some listed defaulting and recalcitrant employers as well as facilitate the gazetting of all the lawyers working with the fund to enable them appear on behalf of the NSITF in court for the recovery of outstanding monies due to the fund.
“Going forward, the NSITF needs the support of the tripartite stakeholders to build ECS into a world class social security institution capable of triggering social change and poverty reduction in Nigeria.”
“To this end, the NSITF obviously needs all the help it can get, especially from the Minister of Labour and Employment, to interface with the Ministers of Finance and that of Budget and National Planning to facilitate the payment of the ECS contribution arrears of 2012 to 2023 which runs into billions, to interface with the National Assembly for the amendment of the ECA 2010. Also, to interface with the Minister of Finance and the Accountant General of the Federation to remove NSITF from the schedule of the Fiscal responsibility Act for the deduction of 40 percent of contributions received from the private sector. Over N1.4 billion was deducted from our account in 2022 and much more may be deducted this year save for your intervention.”
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