Economist advises govt to set aside 2% for insurance premium

The former Director General, Lagos Chamber of Commerce and Industry (LCCI) and Chief Executive Officer, Center For Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has told the Federal Government to set aside a minimum of two percent yearly for non-debt expenditure for insurance premium.

Besides, he called on the Government to decentralize insurance premium payment at the Federal Ministries, Departments and Agencies (MDAs).

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He made the call in his presentation titled “2023 Budget and insurance industry” at the 2022 Insurance Industry Consultative Council (IICC) media retreat in Ijebu Ode Ogun State recently.

According to him, for the Federal Government to meet its insurance obligation as the highest spender, at least a minimum of two per cent must be set aside for insurance premiums annually from the non-debt expenditures.

The economic expert emphasized the need for the decentralization of insurance premium payment at the federal level arguing that in the 2023 Ministries, Departments and Agencies (MDAs) budgetary provisions for insurance premium compared to the total budget for the year is grossly inadequate.

According to him, details of the budgetary provisions for insurance premiums of some of the government MDAs, he said showed Head of Service with a total budgetary allocation of N8.4 billion, set aside N16.3 million (1.9%) as insurance premium; Economic and Financial Crime Commission (EFCC) with a total budgetary allocation of N43.2 billion will pay 213 million (0.5%) as insurance premium for 2023; Federal Road Safety Commission (FRSC) will pay N250 million (0.5%) as insurance premium from a total budgetary allocation of N60 billion.

Besides, the Nigeria Police Force (NPF) with a total budgetary allocation of N805 billion, N294 million (0.5 per cent) was allocated for insurance premiums; Plant Quarantine allotted N37.8 million (0.14%) of the N27 billion allocation for insurance premium; Finance Ministry with a total budgetary allocation of N259.2 billion only set aside N35.4 million (0.01%) for insurance premium; Works and Housing with a total budgetary allocation of N356 billion set aside N5 million (0.001%) for insurance premium; Labour Ministry allocated N5.9 million (0.06%) for insurance premium from a total budgetary allocation of N9.5 billion and Power with a total N162.7 billion allocation set aside N1 million (0%) for insurance premium.

He expressed regret that the pronouncement by the government that all government assets should be insured is yet to be implemented, adding that budgetary allocations to insurance premium by the Federal Government Ministries, Departments, and Agencies (MDAs) “are grossly inadequate.”

Dr.Yusuf said the MDAs do not even have any budgetary allocation for insurance premium adding that there are also concerns about the centralization of insurance premium in the Office of Head of Service.

He called on the stakeholders to take advantage of the window of opportunities offered by the Secretary to the Government of the Federation (SGF) for increased budgetary allocation for insurance premium.


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