We didn't reject Ministry of Finance 40% employers' deduction contributions

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The Nigeria Social Insurance Trust Fund (NSITF) has stated that it never rejected a 40% deduction of employers’ contributions by the Finance Ministry, as reported in a section of the media.

The Fund clarified that its Managing Director, Maureen Allagoa, had, in a New Year message, reiterated an appeal made earlier to the former Minister of Labour and Employment, Simon Lalong, on October 3, 2023, for a review of the inclusion of the NSITF in the Fiscal Responsibility and Finance Act of 2020. This request is due to its special status as a non-treasury funded agency holding contributors’ money in trust.

A statement signed by its General Manager, Corporate Affairs, Nwachukwu Godson, on Wednesday in Abuja, further stressed that the Fund does not have such powers, as the management is fully aware of the circular on the Presidential Directive regarding a 50% Automatic Deduction from Internally Generated Revenue of Federal Government-Owned Enterprises.

The statement reads: “For the avoidance of doubt, this is what the Managing Director’s statement released on New Year’s Day stated:

“The NSITF stands at the threshold of social and economic change and is poised to overcome its challenges as the custodian of social security.

“Amidst our accomplishments, we are grappling with challenges impeding the fulfillment of our mandate, one of which is the deduction in 2022 of 40%, amounting to N1.4bn, from employer contributions by the Ministry of Finance as an operating surplus in line with the Fiscal Responsibility and Finance Act of 2020, despite the fact that the NSITF is not a revenue-generating agency.

“The NSITF is a tripartite agency holding funds-contributions in trust for the benefits of employees under the ECS and without an operating surplus. The NSITF is also not treasury-funded and does not draw from the Consolidated Revenue Fund of the Federation, and therefore seeks a review and removal from the schedule of the Fiscal Responsibility Act.”

Speaking further on the Fund’s agenda for the New Year, Allagoa said that the poverty reduction agenda of the Tinubu administration has a direct bearing on the mandate of the NSITF.

“The NSITF will tap into areas of the ILO Convention 102 on old age benefits, unemployment, and family benefits as well as expand the agency’s corporate social responsibility programs on skills acquisition and empowerment in line with the Eight Point Agenda of the Tinubu administration.”

She added that the Fund would create new branches and service centers in 2024 to expand social services to the doorstep of all Nigerians in line with the social inclusion standards of the ILO Convention 102. The agency will consolidate its 2023 achievements while expanding the percentage of the population protected by the social security scheme.

“We are expanding our operations into the informal sector and other unreached areas in dire need of our services so as to save more people from lacerating social conditions.

“We will create new branches to this end as well as build service delivery centers to be activated in select regions as a pilot in the first quarter of 2024. The focus is to reach Nigerians in the remote hinterland while reducing commuting distance for our staff members.”

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