The mammoth assertion of fraud recently uncovered by the Economic and Financial Crimes Commission (EFCC) in the activities of the Nigeria Social Insurance Trust Fund (NSITF) has brought to bear the ineptitude service the scheme offers.
Last week, the EFCC declared wanted Ngozi Olojeme, the former Chairman of the NSITF for allegedly diverting $48,485,127 from the organisation. Mrs Olojeme, who served as the Chairman of the NSITF from 2009 to 2015, is on the run for presumably diverting funds meant for compensation to contributors as well as the payment of allowances of staff.
Arguably, with about 11 regional offices, 55 branches and staff strength of about 5,000, no one really desires that NSITF staff lose their jobs, but truth be told that since ceding its pension’s business –in compliance with the Pension Reform Act, and getting the mandate for the provision of Social Security Insurance Services by operating the Employee’s Compensation Act, the NSITF has been nothing but a brain-pipe and an additional cost to businesses in Nigeria.
Its new core business which is supposed to be an aspect of insurance has not fully experienced much progress. Rather, private sector insurers are more positioned in carrying social security insurance services and workplace injury compensation. Also, since the NSITF function is outside the purview of the National Insurance Commission (NAICOM) –the regulatory agency monitoring insurance companies in Nigeria, its case has been a question of who regulates the regulator.
Futile Compensation
Funded based on 1% of payroll from all government and private sector employees enrolled in the scheme, the NSITF was designed to provide compensation to employees who suffer from occupational accidents or diseases in the line of duty. But a larger percentage of the over 50,000 registered employers in the scheme know that no serious claims have been paid to those injured in their workplaces. That is why many state and local governments as well as private organisations are not considering joining the scheme because they are not seeing any true benefit in what it supposedly offers.
Available data shows that the Trust Fund has only been able to pay about N800 million as compensation to over 6,000 workers that sustained various degrees of injuries in the course of work. Meanwhile, hardly will a week go by in Nigeria that the media will not be awash with the news of injured workers in line of duties crying for funds from the public to undergo medical treatments, especially industrial workers owned by foreigners.
During the “2017 World Day for Safety and Health at Work,” the International Labour Organisation (ILO) said that one worker dies every 15 seconds and 153 are involved in work-related accidents globally.
EFCC Report on Olojeme
While injured workers are groaning in Nigeria, EFCC’s investigation revealed how funds meant for compensation to contributors were systematically embezzled by past officials of the NSITF.
An EFCC report stated: “It was discovered that the NSITF accounts in First Bank of Nigeria and other banks have witnessed a total turnover of over N62,358,401,927 between 2012 and 2015 from the Employee Compensation Scheme contributions.
“That out of the N62 billion, the Federal Government contributed N13,600,000,000 while the sum of N48,758,401,927.80 was contributed by the private sector. That there were several payments to individuals and companies from the NSITF bank accounts for purported contracts or consultancy services.
“That some individuals and companies that received these payments, in turn, transferred part of the monies directly to the NSITF officials while others transferred huge sums to bureau de change operators who changed them to dollars.”
The report further stated, “That through this process, Dr. Ngozi Olojeme, the then NSITF board chairman, has collected a total sum of $48,485,127 from Mr. Chuka Eze (her account officer at FBN), which cash he collected on her behalf being the dollar equivalent of monies paid to BDCs by NSITF contractors.
“That she has refused to honour invitation and all efforts to get her to come and tell her own side of the story have proved abortive hence her arrest warrant has been obtained from court.
“We ask for the EFCC chairman’s approval to declare the suspect wanted.”
Failed Mission
The NSITF was mainly founded with the mission “to be proactive in providing social security protection and safety nets for all Nigerians against deprivations and income insecurity,” especially in accordance with Convention 102 of the ILO which stipulated nine benefit branches for minimum standard of social security, namely: medical care, sickness, unemployment, old age, employment injury, family, maternity, invalidity and survivors’ benefits.
Regrettably, the Nigeria Social Insurance Trust Fund is only implementing compensation for workplace injury out of the nine branches of social security as spelt out by the ILO.
The Minister of Labour and Employment, Chris Ngige, also acknowledged this fact when he said recently that the Trust Fund had not lived up to expectations. Mr Ngige said that “Nigeria is yet to ratify ILO Convention 102 on social security fully,” even though “the country is operating many of the branches of the convention that include health insurance, conditional cash transfer and other social intervention programmes.”
Meanwhile, it is worthy to note that the professed branches of the ILO Convention being operated in Nigeria are carried out by organisations and special government’s programmes outside the activities of the NSITF.
Although, the Trust Fund said it has sent a bill to the National Assembly for the amendment of the NSITF Act for it to execute other programmes apart from the employee’s compensation Scheme, what would be appropriate for any serious government is to wind up this scheme and return social security insurance services and workplace injury compensation to private sector insurers for effective implementation.
