At a recent media parley with the Labour Correspondents Association of Nigeria (LACAN), the Managing Director of the Nigeria Social Insurance Trust Fund (NSITF), Barrister Oluwaseun Faleye, shed light on the major challenges hindering the effective implementation of the Employees’ Compensation Scheme in Nigeria. CHRISTIAN APPOLOS of the Nigerian Tribune was there:
Federal Government support and operational steps
We are pleased to report renewed momentum from the Federal Government regarding the Employee Compensation Scheme (ECS). A recent correspondence from the Head of Service of the Federation reaffirms her unwavering commitment to the success of the scheme and encourages all relevant parties to support its implementation. This signal from the highest level of the federal civil service is a critical step in fostering widespread adoption across Ministries, Departments, and Agencies (MDAs).
The federal government’s interest in the ECS has grown significantly, largely due to our concerted efforts in articulating the tangible benefits the scheme offers. These benefits, which include financial protection for employees, timely compensation in the event of workplace accidents, and improved occupational health standards, are now well understood at the top levels of government. This enhanced understanding has opened the door to more constructive engagements and smoother collaboration.
Moving forward, we are preparing for high-level engagements with the Office of the Head of Service to fine-tune operational strategies and harmonise processes that will ensure seamless enrollment and administration of the scheme. Our internal team is set to meet with key stakeholders to map out these steps, address bottlenecks, and develop mechanisms that will streamline implementation across the federal public service.
MDAs compliance and budgetary awareness
While federal-level commitment is growing, compliance among individual MDAs remains inconsistent. There has been what we might describe as lukewarm engagement from some MDAs in terms of actual subscription and participation in the scheme. We recognise that the responsibility for driving compliance lies heavily with us, and we are taking this task seriously.
To address the compliance gaps, we have devised a multi-pronged strategy centered on advocacy, sensitisation, and direct stakeholder engagement. We are leveraging media partnerships to amplify awareness of the ECS and its benefits. Moreover, we are conducting focused outreach meetings with MDA leadership, aiming to communicate not only the legal obligations but also the organizational and human capital value the ECS offers.
One recurring challenge is the lack of budgetary provisions for ECS contributions in some MDAs. This, in many cases, stems not from unwillingness but from inadequate awareness and planning at the budget formulation stage. We are addressing this through targeted awareness campaigns directed at budget officers and decision-makers so that ECS contributions can be properly factored into annual budgets. Once the provision is in place, follow-up and enforcement become more straightforward. As we build awareness and deepen relationships with MDAs, we expect a corresponding rise in formal participation.
Challenges with state and local government participation
One of the more pressing challenges we face is the low level of compliance among state and local governments. This shortfall significantly affects our subscriber base, which currently stands at approximately 7.6 million. This figure, while commendable, does not reflect the full potential of the ECS, especially if all public sector workers—federal, state, and local—were actively enrolled.
Unfortunately, many state and local government institutions have not yet embraced the scheme. This has implications not only for the financial sustainability of the ECS but also for the welfare and protection of millions of Nigerian workers who remain unprotected. However, we are not relenting. We have identified this gap as a top priority and are intensifying efforts to engage subnational governments.
Lagos State stands out as a positive example. The state has fully subscribed to the ECS, and we are currently working closely with them to operationalize the scheme and ensure efficient delivery. Our experience with Lagos will serve as a model to encourage other states. We are calling on all states to emulate Lagos’s leadership and commitment to workers’ welfare by coming on board with the ECS.
Service culture and focus on prevention
Beyond enrollment and compliance, a key component of our mission at NSITF is improving our service delivery culture. We believe that protecting employees goes beyond compensation—it begins with prevention. To that end, we have invested significant resources into enhancing occupational safety and health standards across subscribing organizations.
Through our Health, Safety and Compensation (HSC) department and strategic partnership with the Nigeria Employers’ Consultative Association (NECA), we carry out regular safety audits and workplace assessments. Our safety officers visit organizations to evaluate their occupational health conditions, identify hazards, and provide tailored recommendations to reduce risks. These proactive audits have proven effective in reducing workplace incidents and building a culture of safety.
In addition to audits, we provide safety training and awareness programs tailored to various industries. These initiatives are part of our broader effort to build a preventive culture and reduce the occurrence of workplace injuries and illnesses. We are also investing in internal capacity building through staff training programs to enhance the professionalism and responsiveness of our teams. Our ultimate goal is to ensure that prevention remains the cornerstone of the ECS, backed by swift and transparent compensation where accidents do occur.
Barriers to enrollment and the need for awareness
A significant barrier to broader ECS participation is a widespread lack of awareness. Many employers and employees simply do not understand what the NSITF does or how the ECS operates. However, whenever we have the opportunity to explain the scheme in detail, we observe a marked shift in perception and an increased willingness to participate.
We are therefore expanding our stakeholder engagement efforts to reach more employers, employees, professional bodies, and trade associations. These engagements are not only informative but also help to correct misconceptions and foster trust in the system.
Enforcement is another major hurdle. Although the Employee Compensation Act mandates employers to register and contribute, we sometimes face resistance during field operations. Our inspection officers are occasionally prevented from accessing workplaces to assess compliance or inspect relevant records. This limits our ability to protect workers effectively. To address this, we are in discussions with the National Assembly to enhance our legal authority, including powers of entry and the ability to sanction non-compliant organizations.
Employee complicity and the consequences
Another layer of complexity lies with employees themselves. In some cases, employees collaborate with employers to underreport earnings or misrepresent staffing figures, believing they are helping the organization or protecting their own jobs. Unfortunately, this behavior ultimately harms the employee.
When compensation claims are made, payments are based on the declared salaries and employment status. Therefore, underreporting results in lower benefits when accidents or injuries occur. We are incorporating this message into our advocacy campaigns, with a specific focus on accountants and finance managers—those who handle payroll documentation. These professionals must understand that compliance benefits the entire workforce and that falsifying records has long-term consequences for workers’ welfare.
Expansion goals and inclusion of informal sector
As part of our long-term strategic plan, we have set an ambitious goal to enroll at least one million new employees annually into the ECS. This is not just about numbers—it is about ensuring broader social protection and economic inclusion. The ECS is designed to safeguard workers, enhance workplace safety, and provide timely financial compensation in cases of work-related injuries, disabilities, or fatalities.
In alignment with the federal government’s broader social protection agenda, we are now turning our focus to Nigeria’s vast informal sector, which accounts for over 70% of the workforce. Workers in this segment are often the most vulnerable and least protected. To bridge this gap, we are designing flexible, innovative schemes tailored to the realities of informal workers such as artisans, traders, transport workers, and small business employees.
We will soon unveil specific initiatives to bring these groups into the ECS framework. This will include simplified registration processes, sector-specific safety education, and contribution models that reflect the income patterns of informal workers.
Call for collaboration and strategy rollout
We are using this opportunity to call for stronger collaboration from employers, employees, state institutions, and civil society actors. The success of the ECS depends on a shared commitment to worker protection and workplace safety.
To this end, NSITF is rolling out several new strategies: digital registration and compliance tracking systems, expanded awareness campaigns using both traditional and digital media, and a more aggressive enforcement drive. These steps are designed to enhance transparency, increase compliance, and ultimately build a stronger, more inclusive social safety net for Nigerian workers.
Our collective goal is to create a compensation system that not only responds effectively to workplace accidents but also prevents them. A system that provides peace of mind to workers and promotes productivity for employers. Together, we can protect the workforce and build a healthier, safer Nigeria.
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