The Federal Government has initiated a strategy to extend financial protection to millions of Nigerians currently without insurance coverage.
The initiative, which marks the first major implementation phase of the recently signed Aso Accord, brings together the nation’s top financial and insurance regulators in a collaboration to transform Nigeria’s insurance landscape.
Senator Ibrahim Hassan Hadejia, Deputy Chief of Staff to the President (Office of the Vice President), disclosed this during a roundtable meeting on Tuesday.
“This marks the first time insurance is being formally recognised as a critical financial service in Nigeria’s economic framework,” Hadejia noted.
He emphasized the need for financial inclusion through insurance.
“We cannot build a resilient economy while leaving millions of our citizens financially exposed, financial inclusion, particularly through insurance access, serves as the crucial driver that will propel Nigeria toward sustainable economic growth,” he stated.
Addressing the insurance gap
Dr. Jankara Usman, Deputy Commissioner of Technical at the National Insurance Commission (NAICOM), discussed the potential benefits of the initiative.
“Through inclusive insurance, we can provide tailored, affordable products that promote financial readiness and advance social well-being.”
He highlighted data from the World Bank, noting that “only two out of five adults in sub-Saharan Africa can raise $35 within 30 days.”
He also pointed out that Nigeria’s insurance penetration rate stands at just 3.3%, which is below global averages.
Dr. Nurudeen Zauro, Technical Advisor to the President on Economic and Financial Inclusion, mentioned that the meeting reflects President Bola Ahmed Tinubu’s commitment to the insurance sector.
He indicated that the government will establish a monitoring framework to ensure the effective implementation of the decisions made during the roundtable. This framework will focus on:
- Forming specialized committees for financial control
- Developing risk management programs for smallholder farmers
- Fostering public-private partnerships
- Strengthening inter-agency collaboration
- Simplifying processes for innovative insurance products
Proposals for expanding access
The roundtable produced several proposals aimed at expanding insurance access, including:
- Mobile Phone Airtime Purchases: Allowing insurance purchases through mobile phone airtime.
- Specialized Micro-Insurance Products: Creating tailored micro-insurance products for low-income segments.
- Blockchain Technology Integration: Utilizing blockchain technology for insurance delivery.
- Digital Platforms for Agricultural Insurance: Developing digital platforms specifically for agricultural insurance coverage.
The initiative has received support from key institutions, including the Nigeria Insurance Association (NIA), National Health Insurance Authority (NHIA), Central Bank of Nigeria (CBN), and other regulatory bodies. Their involvement will be essential for the successful implementation of the proposed strategies.
The outcomes of the roundtable will be presented to the National Economic Council (NEC) for further consideration.
What you should know
- The Nigeria Labour Force Survey, published by the National Bureau of Statistics (NBS), reveals that only 26.3% of Nigerian workers had a pension plan and health insurance in 2023.
- Among the states, Zamfara in the Northwest recorded the highest percentage of employees with both health insurance and a pension plan, at 65%. In contrast, Abia state had the lowest rate, with just 3.9% of wage employees having access to these benefits.
The report states that “the percentage of employees entitled to either pension or health insurance schemes in Nigeria was 26.3%. Zamfara state had the highest (65.9%) while Abia had the lowest (3.9%) among wage employed.”
- This low percentage of employees with pension and health insurance plans is largely attributed to the significant number of informal sector workers in Nigeria, with the study indicating that approximately 92% of the employed population is engaged in informal employment.