Government set to start Social Protection Coverage to Nigerian Workers

The stage is set for the implementation of the Employees Compensation Scheme (ECS) set up by the Federal Government with the inauguration of a new board of the Nigeria Social Insurance Trust Fund (NSITF) to manage the scheme. Linda Eroke writes that this great feat will extend social protection coverage to Nigerian workers

The full implementation of the Employee Compensation Scheme has been set in motion with reconstitution of a new board of the Nigerian Social Insurance Trust Fund (NSITF) by the Federal Government.

Barely three weeks after the new board was inaugurated, management of NSITF last week unveiled its Lagos Corporate Office, an edifice located at the high brow area of Ikeja to drive the scheme. The launching was witnessed by the three social partners comprising employers, government and the organised labour.

NSITF Charge on Objectives
Minister of Labour and Productivity, Chief Emeka Wogu, who unveiled the new office, charged the board and management of NSITF to articulate the objectives of the scheme to all Nigerian workers.

He pointed out that achieving the singular objective would not only complement similar social protection schemes of the transformation agenda of President Jonathan, but would also improve and promote social equity and sustainable growth at human development index necessary to stimulate more employment in all sectors of the economy.

Wogu explained that the Federal Government’s commitment to extend social protection coverage to all Nigerian workers is based on the ILO 1994 Philadelphia Declaration.

This states that “All human beings, irrespective of race, creed or sex have the right to pursue both their material wellbeing and their spiritual development in conditions of freedom and dignity of economic security and of equal opportunity…To achieve the extension of social security measures to provide a basic income to all in need of such protection and comprehensive medical care’.
He said the government aimed at a zero-tolerance on workplace accidents, injuries and fatalities, and was determined to collaborate with all social partners and other stakeholders to guarantee a cleaner, safer and heather work environment to all Nigerian workers.
He reiterated government’s determination to comply with the specific provisions of Articles 22, 23 and 25 of the Universal Declaration of Human Rights (UDHR) which states that ‘Everyone as a member of society, has right to social security” and “Everyone has the right top work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment”.
He explained that the principle of social protection has already been ingrained as part of the government’s resolve to implement the ECS which is already on course.

According to him, the launching of a befitting work environment in the industrialised city of Lagos will provide a safe harbour for workers to promptly access claims whenever the need arises.

“The commissioning of this Corporate Office here in Lagos is significant and historic in many ways. First, it is the first corporate office of the fund after the re-constitution of the Board. It is therefore instructive to note that the extension of social protection floor coverage to workers has gone beyond the level of policy rhetoric to implementation and performance space.

“It is expected that the Fund will bring the benefits of this new ECA to many deserving workers in Lagos State and its environ. Its location here is strategic enough for access to both employers and labour,” Wogu said.

He challenged the board and management of NSITF to hit the street running adding that President Jonathan expects a lot from them. He assured listeners that the ministry would strengthen the industrial relations intelligence services of the inspectorate department of the labour ministry with a view to reducing accidents in workplaces.

The minister expressed government’s determination to collaborate with social partners and other key stakeholders to guarantee a cleaner, safer and heather work environment to Nigerian workers.

To this end, he said the ministry is strengthening its internal units and deepening its intelligence network to ensure that workplace rights of Nigerian workers are not violated or exploited.

According to him, the inspectorate units have commenced visitations to factories to ensure that owners comply with Nigerian law and international best practices and that workers work in a safe environment.

Presentation to Injured Employees
Part of the ceremony was the presentation of a N557,800 cheque to the Director, Human Resources, Cappa and D’Alberto Plc for health care support to injured employees.

The presentation made by the minister, officially signalled the commencement of the scheme. In her remarks, NSITF Board Chairperson, Dr. Ngozi Olejeme, said the scheme was a silent revolution that was carefully thought-out and executed by the government in order to ensure that the welfare of Nigerian workers is given top priority.

She particularly commended President Jonathan for approving a take-off grant that will enable NSITF implement the scheme, adding that the president has already issued a directive that the grant be immediately released to drive the project.

“President Jonathan recently approved the immediate re-constitution of the NSITF Board along with the confirmation of appointments of the executive management team so as to ensure that nothing delays the smooth implementation of the scheme. No other scheme, agency or parastatal has received such attention.

“Similarly, no one needs to be convinced further of Mr. President’s concerns and commitment to the welfare of Nigerian workers through these actions. These actions of Mr. President have portrayed his commitment in ensuring that the scheme succeeds and that it serves Nigerian workers in the best way possible,” she said.

She explained that the commissioning of the Lagos Corporate office of the fund is a practical demonstration of the NSITF to ensure the immediate and effective implementation of the new scheme.

She said the historical antecedents and contemporary reality of Lagos in the industrial relations practice in Nigeria made it imperative a substantial part of the activities of the fund will be concentrated in Lagos so that the immediate positive impact of the scheme will be felt in thousands of workplaces in the city of excellence.

She said the office would be equipped with appropriate state of the art facilities and infrastructure that would from the onset, drive the scheme just as is being done in other compensation schemes around the globe.

Speaking further, she said the Lagos corporate office will be manned by seasoned, committed and professional staff in order to ameliorate the challenges of workplace accidents, incidents and injuries.

“It will also enable us respond promptly to complaints, claims and enquiries that are always part of schemes of this nature. It will furthermore, be a model on the handling of occupational, safety and health matters in the workplace for other employers to emulate,” she added.  

Stakeholders Declaration
In his remarks, Director General of the Nigeria Employers’ Consultative Association (NECA), Dr. Segun Oshinowo, commended the bold initiative of the board and management of the NSITF to set up a befitting administrative environment for the fund in Lagos.
He however challenged the NSITF team to deliver on its mandate to Nigerians, stressing that workers demand nothing less than a first class performance from the fund.

He was optimistic that NSITF has the capacity to achieve first class performance, and pledged the support of NECA towards the success of the scheme.

“NSITF has everything going for it, the goodwill and support of workers, labour unions, the employers and the Federal Government, what we are asking of NSITF today is First Class performance,” Oshinowo said.

President General of Trade Union Congress of Nigeria (TUC), Mr. Peter Esele, who also spoke at the event, commended the board for its achievements within a very short period. He charged the NSITF on quality service delivery stressing that the issue of social security, particularly the implementation of ECS should go beyond rhetoric, policy formulation to efficient and effective implementation of the scheme.

“What we expected to get is service delivery, we ask for commitment and effective service delivery. Anything short of First Class performance will not be accepted to labour,” Esele said. He urged the Federal Government to immediately release the fund allocated for effective take-off of the scheme.

President of the Nigeria Labour Congress (NLC), Abdulwaheed Omar, lauded the NSITF for a great feat which he said no other agency of government have been able to achieve. He said the signing into law of the Employee Compensation Act by President Jonathan was an indication that government was committed to the welfare of Nigerian workers.
Omar said the scheme covered the entire population in view of the fact that every Nigerian worker carters for his entire household in addition to extended families.

He charged the labour minister to ensure to concentrate efforts in ensuring that government ministries, agencies and parastatals consistently remit their contributions to the NSITF as at when due.

Income Disparity, Poverty in Nigeria Depict Defective Macroeconomic Structure

Widening income inequalities and growing poverty in Nigeria are not moving in tandem with the nation's Gross Domestic Product. This has forced economists to conclude that the disparate trend typifies the imperfections in the country's macroeconomic structure, reports Festus Akanbi

There's no doubt that the National Bureau of Statistics' report on the rising level of poverty in Nigeria, made public a fortnight ago, may have provided some insight into the growing frustration and the attendant rising wave of violence in some parts of the country in recent times. The report showed that 60.9 per cent of the Nigerian population or approximately 100 million people lived in abject poverty in 2010. It went further to state that this class of people lives on less than $1 or N160 a day.

Reacting to the NBS report, economists observed that what was more startling was that income inequalities were not in lockstep with the nation's growth rate of 7.87 per cent in 2010. In other words, the rich are getting richer and the poor are sinking deeper into poverty. The NBS data showed that the percentage of Nigerians living in abject poverty has increased from 54 percent in 2004 to 61 percent in 2010.

Managing Director, Financial Derivatives Company Limited, Mr. Bismarck Rewane, in his analysis of the NBS data, said the document and trend raises two fundamental questions. One was why income disparities are increasing and the second was the consequences of this unhealthy trend?

However, just as Nigerians were absorbing the NBS data on the rate of poverty, the organisation in another report last week, released the inflation figure for the month of January, putting it at 12.6 per cent, as against 10.3 percent in December 2011.

Income Inequalities

According to the NBS report, a critical measure of poverty is the gini coefficient, which the London Head of Macroeconomics, Standard Chartered Bank, Ms. Razia Khan, described as a measure of income inequalities that is used in many places. According to her, if the gini coefficient in a country or region is high, as in South Africa, then it means that the income inequality is high. 

The latest data from NBS showed that in 2004, the gini coefficient was 0.4296 whereas in 2010 it was 0.4470, indicating that inequality increased by 4.1 percent nationally. The development, according to economic analysts, has created a stratified society and is capable of fueling distrust and hopelessness among the people in the disadvantaged regions of the country.

The data churned out by NBS also showed that despite the fact that the Nigerian economy was paradoxically growing, the proportion of Nigerians living in poverty was increasing every year. The proportion of the population living below the poverty line increased significantly from 1980 to 2004, indicated the NBS.

The report lent credence to a publication last year which suggested that the GDP per capita between the northern and southern parts of the country was widening. The report showed that the GDP per capita in the south was twice that of the north.

GDP per capita is the GDP (total income) of a country, divided by its population. It shows how much money people earn on average. So while GDP is the dollar value of all goods and services produced within a country, state or city's borders in a given year, when divided by the population in a given year, it gives the GDP per capita.

Given that Nigeria's 36 states have been regrouped into six geopolitical zones - north-central, north-east, north-west, south-east, south-south and the southwest - this arrangement is generally accepted and used by the political class to facilitate the balancing of the distribution of appointments and nominations within parties and governments, to reflect the federal character. However, the NBS's report showed clearly that while the standard of living fell alarmingly in the northern parts of the country, the situation was the opposite in the south.

Rewane explained that whenever income inequalities are an increasing function of time, it is usually as a result of fundamental imperfections in the macroeconomic structure of the country. He also blamed it on the consequences and fall out of state-owned monopolies, regime sponsored oligarchs, and an entrenched form of crony capitalism.
Drawing a parallel between rising inequalities and the wave of violence in certain parts of the country, Rewane said: “It is important to understand that the poverty is infinitely more intense in the northern parts of Nigeria. Sokoto State, for instance, has the highest poverty rate of 86.4 percent and Borno has 77.7 percent. There is therefore the likely correlation between poverty, anger and resentment of government in that region.”

Economic Distortions

The FDC boss stated that the CBN governor, Mallam Sanusi Lamido Sanusi was courageous enough to start this very important conversation and debate about the link between poverty and group anger. “This has not gone down well with some people. But what is wrong with a healthy debate, we don't have to agree on everything,” he noted.

He stressed the need to tackle unemployment by incentivising labour and capital intensive investments in the rural parts of Nigeria. The answer, according to him, is not in allocating more money to inefficient and corrupt state governments, adding that the January protests were more against corruption, leakages in the economy, lack of transparency, and inefficiencies, than against legitimacy.

“The government must now earn its credibility by identifying corruption and punishing high profile officials and culprits. It is only by a consistent, credible and pragmatic programme that goes to the structural causes of poverty that the government can get back the trust of the people,” he added.

When confronted with the fact that the spate of violence orchestrated largely by the Boko Haram sect in the north could deter investment in the area, Rewane said the Nigerian government cannot wait till eternity for the violence to stop before it puts in place adequate measures to increase prosperity in the area. He argued that government was able to negotiate with the Niger Delta militants, after which development was taken to the area, wondering why similar efforts cannot be made in the north.

He cited the Angola example, saying the area was in turmoil; yet, investors still found the place a haven. The FDC boss explained that what private investors need urgently was government backing, explaining that the situation will change for the better if investment is taken to the region. Rewane stated that mass poverty can lead to a class war especially in homogenous societies, citing France during the French revolution and Romania after the fall of Communism as examples.

“However in non-industrialised economies like Nigeria with ethnic and sectarian diversity, the class struggle could manifest itself in religious intolerance, ethnic xenophobia and threats to national security. Mass poverty and a future without hope leads to widespread resentment and a public backlash against the government, constituted authority and the elite.

“There are examples of how the resentment of the Niger Delta citizens transformed an environmental issue into a struggle for resource control and finally into militancy, kidnapping, bunkering, etc. We are witnessing the radicalisation of North-eastern Nigeria into religious intolerance and political brinkmanship. These threats to national security are probably the symptoms of long years of mass structural poverty in a society where hopelessness and despair are gradually displacing optimism and confidence.”

Similarly, a senior lecturer in the Department of Economics, University of Lagos, and Dr. Babatunde Adeoye, observed that political leaders in the north cannot be exempted from blame for their failure to impact positively on their environment. He maintained that increasing monthly revenue allocation to the states in the north will not make any difference unless there is a genuine determination of the ruling class to bring development to the people of the area.

One of the ways to bridge the gap between the south and the north, according to him, is to focus on education. He maintained that once the people in the north are educated, they will be in position to ask for their rights in a non-violent way.

Adeoye pointed out that the NBS data has corroborated the position of the United Nations Development Programme in 2011, which ranked Nigeria 142 out of 169 countries surveyed and categorised as a low human development economy in 2010.

According to him, the report further indicated that out of the total population in 2000-2010, 63.5 per cent were suffering from at least three deprivations as a measure of multi-dimensional poverty and the intensity of deprivation was estimated at 57.9 per cent; 42.4 per cent, 59.5 per cent and 72.1 per cent. These people were severely deprived in education, health and living standards respectively, while 64.4 per cent of the total population lived below the poverty line of $1.25 a day.

These indicators revealed that majority of Nigerians still suffered from high intensity of deprivation and a high incidence of multi-dimensional poverty prevalence rate, making it one of the poorest countries on the continent induced by a wide income distribution gap, lack of access to infrastructure facilities, high youth employment and low purchasing power eroded by inflationary pressure.

“However, I will state clearly that I disagree with the disaggregation of the poverty data on a zonal basis as reported by the NBS. For instance, I found it difficult to believe that the south-south geographical zone had lower poverty prevalence when compared to other zones like the north-west and north-east. We all know the current challenges those in south-south are facing such as poor infrastructure, lack of employment and lack of cultivable lands. How they (NBS) came about those figures need some further explanation,” he said.

Rising Inflation and Infrastructure Deficit

In his contribution, managing director, Renaissance Group, Mr. Rotimi Oyekanmi, who offered to speak on the rising rate of inflation, said the recent increase in the pump price of petrol was responsible for the rise in inflation. “We know the reason for the inflation figure jump - increase in the petrol price. This implies that we have a negative real policy rate being negative in January (-0.3%) for the first time since September. This is to be expected following the petrol price increase.”

He stressed the need to intensify efforts on the local production side of the equation to ensure that “we bring down prices of other items in the food basket.” Oyekanmi, who declined comment on the income disparity between the north and the south, said efficiency in production would be another major item for government focus.

“We have heard about plans to increase power generation which has the potential to reduce the cost of production. Also we have heard about plans by the agriculture ministry to increase production of commodities as well increase employment in the sector. Also we have heard about expanded capacity by Dangote Cement and Lafarge which would reduce importation of more expensive cement for local production leading to increase employment of the labour.

“Therefore while we see an increase in inflation, the implementation of the budget and the policies of the government to create the environment for reduced imports and increased local production would reduce the inflation rate,” he said.

In addition, analysts were concerned that infrastructure is collapsing nationwide and this was contributing to widening income disparities and the poverty index nationwide. For instance, they pointed out that power generation hovers between 1,000 to 3,500 megawatts, whereas Nigeria actually needs over 40,000 megawatts to power the economy.

Add to this the fact that out of over 160,000 kilometres of secondary and tertiary roads in Nigeria, with an average registered network of 4,000 kilometres per state, only about 10-15 per cent is paved. While a large proportion of this network remains in poor or very poor condition, with only 15 per cent of federal roads in good condition.

According to a university lecturer who did not want to be named, “It is sad to note that rural roads, which are statutorily referred to as local government roads which constitutes about 132,000 kilometres (67.7 per cent) of the entire road network in Nigeria is the worst hit by this state of disrepair.”