By Ibrahim Wakawa, Esq.
The Tinubu-led administration has growth in Small, Medium and Large Enterprises (SMLE) as one of its key agendas and priority. This requires that all aspects of workers’ welfare be prioritized and accorded adequate attention, since motivated workers are likely to be more productive and drive higher economic growth. Therefore, emphasis on growth opportunities in SMLE(s), by the present government, is a step in the right direction towards the overall growth of the Nigerian economy, and central to its economic agenda.
One of the agencies through which the government discharges its social responsibilities to Nigerians is the Nigeria Social Insurance Trust Fund (NSITF). The agency is currently charged with the responsibility of social security protection of workers against occupational hazards in a limited social security program currently being administered. However, only a nominal fraction of employed Nigerian workers are covered by the Scheme, particularly in view of the spate of accidents involving building collapses, construction, factory and road accidents, which account for the high rate of work-related hazards.
The bad publicity of the staggering number of injuries and deaths of foreign workers in the course of constructing the stadia for the Qatar 2022 FIFA World Cup illustrates and underscores the crucial role of a social security scheme like the NSITF in compensating employees who suffer work-related mishaps. Nigerians working in high-risk foreign or local businesses must be protected under the NSITF Employee Compensation Scheme. From the foregoing, it is apparent that one cannot overstate the need to reposition the NSITF.
BACKGROUND: The NSITF was established in 1961, then known as the National Provident Fund (NPF). It was established with a mandate to cater for non-pensionable employees, including those working in the Federal Government’s employ as casuals. Initially, it was a Savings Scheme based on defined contributions. It was a bipartite contribution of four naira (N4.00) each from both employer and employee. The realized total sum of eight naira (N8.00) was then remitted to the National Provident Fund monthly. At retirement, a lump payment comprising the entire credit months, is made to the beneficiary with accrued interest.
Over time, inflationary trends made such payments paltry as it was not revised to reflect its current inflation-adjusted equivalent. In addition, problems associated with poor record keeping and non-digitization of the same, resulted in a review of the Scheme by the Gen. Ibrahim Babangida-led Military junta. Accordingly, in 1994, the government, in collaboration with the International Labour Organization (ILO), and on its advice, reviewed the Scheme’s organizational structure, contribution rates and modus operandi to transform it from a Provident Fund to a Trust Fund providing limited Social Insurance benefits to employees in the private sector, based on the defined benefit concept.
That Scheme lasted for a period of ten years from 1994 to 2004 when the Pension Reforms of the former President Olusegun Obasanjo regime was introduced. The Pension Reform Act, 2004 (PRA) mandated NSITF to transfer all Pension Assets in its custody to a Pension Fund Administrator (PFA) and focus on providing other Social Security Services which were mostly undefined. The reform sought to separate Pensions from other Social Security benefits in conformity with the ILO Convention 102 of 1952: Social Security [Minimum Standard] (hereinafter called “the Convention”) with nine (9) prongs of social security.
Pursuant to the Person Reform Act, 2004, NSITF established a Pension Fund Administrator (PFA) and successfully transferred pension assets it held prior to the PRA 2004 in excess of N64billion to cover established liabilities of less than N55billion. From 2004, NSITF focused on realizing the mandate to provide other non-pension Social Security services culminating in the enactment of the Employees Compensation Act 2010 (Work Injury Scheme), which has its objectives as: Efficient system to adequately compensate employees or their dependants for work-related accidents; Rehabilitation of employees with work-related disabilities.
Establishment and maintenance of a solvent Compensation Fund for employees and employers.
An efficient appeal procedure. Combining of efforts and resources by relevant stakeholders to prevent workplace injuries, and enforcement of occupational safety and health standards.
NSITF and the commercialization programme of the Babangida regime: The Privatization and Commercialization Act No. 25 of 1988 provides the legal framework under which NSITF, formerly National Provident Fund (NPF), was transformed from being a department under the Ministry of Labour to a partly commercialized corporate institution with legally defined powers, board and management structure. The Nigeria Social Insurance Trust Fund Act No. 73 of 1993 was enacted to give full effect to recommendations of the Technical Committee on Privatization and Commercialization (TCPC) as regards NSITF. The report of the TCPC titled ‘Framework for Commercialization’ (hereinafter referred to as the REPORT), in summary, captures how NSTIF was to be managed and operated thereafter.
Paragraph 18 on page 11 of the REPORT highlighted and addressed certain issues common to commercialized enterprises, such as; Redefining the role, and procedure for the appointment and removal of the supervising ministry, Board of Directors, and management staff, (see page 15, paragraph 25 of the Report); Determination of conditions of service of staff, (see page 16, paragraph 28 of the Report); Tariffs, Budgeting and Budgetary Control, Financial Autonomy and Accountability.
Further, paragraphs 19 on page 12 of the REPORT linked Interference in the operational decisions by supervising ministers to the failure of the enterprises. Government accepted the recommendation of the TCPC on the issue and redefined the role of the supervisory ministries to remove any interference by ministry officials in the day-to-day management of the enterprises.
The government redefined and limited the roles of the supervising ministries to: – Constitutional responsibility for sector policy formulation and determination of broad strategic direction.
Mr. Ibrahim Wakawa, a Legal Practitioner writes in from Abuja.
