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An NSITF without a Board
Five months to the end of the tenure of the present administration, Nigeria Social Insurance Trust Fund (NSITF) has remained without a board to enable it carry out its statutory functions.
President Muhammadu Buhari had appointed a former President of NUPENG, Chief Frank Kokori, as chairman of the NSITF, but the board was not inaugurated alongside others, namely, National Productivity Centre (NPC), National Directorate of Employment (NDE), Micheal Imoudu National Institute for Labour Studies (MINILS). NSTIF is among the parastatals under the Ministry of Labour and Employment. It is one of the key instruments devised by the federal government to address poverty within the nation’s workforce and to protect workers from financial difficulties. The origin of the NSTIF can be traced to the Provident Fund Scheme which later became the Social Insurance Scheme
NSITF, earlier known as the National Provident Fund (NPF) was established by an Act of Parliament in 1961 to provide a poverty alleviation measure as required by convention No.102 of the International Labour Organization (ILO).
At that time, the goal of the scheme was to protect private sector employees (whose employers were then mostly multinationals) from financial difficulties in the event of either old age, cessation of employment, invalidity or death. Most employers didn’t have any scheme like this in place at that time. Funds for the scheme was sourced from a monthly compulsory contribution by members at the rate of 6 per cent of basic salary subject to a maximum of N8 per month or a sum total of N96 per annum to be paid in equal proportion by the employer and the employee. However, in the event of employment cessation, old age, invalidity or death, the cumulative amount contributed plus accrued interest (7per cent as at 1994) is calculated on a compound basis and paid to the contributor or his/her dependent as the case may be. The Act was later amended by another Act of Parliament in 1962 to cover only employees in the private sector, who were not covered by the Pension Service Scheme.
This led to the federal government setting up the Nigeria Social Insurance Trust Fund (NSITF) in July 1994. In line with the establishment Act, all employers of labour in the private sector in the country were to contribute monthly and the organisation was expected to remit this sum to the NSITF coffers.
The trouble with the enthronement of the board of the NSITF started when the Minister of Labour and Employment, Chris Ngige, said he had the instruction of President Muhammadu Buhari to stay action on inauguration of the board of the fund pending the outcome of an administrative enquiry set up by the ministry to investigate the alleged looting in the agency.
Lots of dust have been raised since the inauguration of the NSITF board was put in abeyance. The matter almost pitted the minister against the national chairman of the All Progressives Congress (APC), Adams Oshiomhole.
In a letter to dated 17th July 2018 with a reference number: No. ML.HMO/LAB/126/III/208 and addressed to Ngige explained that contrary to insinuations, the non-inauguration of the board was not a deliberate act.
In the letter, the minister stated that the alleged involvement of some members of former board of NSITF in major issues of corruption involving about N48 billion, which comprises federal government and employers’ contributions to the Employees’ Compensation Fund plus some non-remitted PAYE taxes were some of the reasons the board was not inaugurated alongside that of the National Directorate of Employment (NDE) whom is the chairman, National Productivity Centre and Michael Imoudu Institute for Labour Studies (MINILS), Ilorin, on March 8, 2018.
The issued has been addressed with the conclusion of investigation by the Economic and Financial Crime Commission (EFCC). Findings showed that the EFCC has not conducted investigation on the management of the NSITF, some persons indicted are currently being prosecuted.
However, another dimension was added to the intriguing controversy as the minister of labour said last week that all the board member-nominees for the NSITF have undergone screening with exception of two nominees from the NLC. He said the NLC nominees have so far declined to make themselves available for security screening, hence further delaying the inauguration of the fund’s board. The Minister’s Special Assistant on Media, Nwachukwu Obidiwe, told THISDAY last Wednesday that the ministry is waiting for the NLC representatives to present themselves for security screening like other members of the board before the inauguration will take place.
But worried, President of the Nigeria Labour Congress (NLC), Ayuba Wabba, has dismissed the excuses given by the ministry. First, Wabba said the issue of corruption probe could not be used to delay the commencement of work by the board, since the one the key essence of putting the board is to help in over-sighting the operations of the fund. Wabba said the EFCC had since submitted report of its investigation, noting that about three officials of NSITF had been taken to court over the allegations of financial misappropriation. He also disagreed with the minister that two NLC representatives were the ones delaying the inauguration of the NSITF board. He told THISDAY last Thursday that contrary to claims by the minister that the NLC was being reluctant to present its nominees for security screening, it is the ministry that has been delaying the process. He said the ministry did not invite the NLC representative for the security screening. According to Wabba, it was only last Tuesday that they received the letter of invitation for screening.
Wabba noted, “Our two representatives have submitted their names since more than two years ago. In fact, it was after I granted an interview on January 9 that the minister wrote us a letter on January 14 and said the screening of members of the board of the NSITF and the Michael Imoudu Institute for Labour Studies (MINILS), Ilorin in Kwara State has been done and that our two representatives were not available for screening and I responded immediately informing the minister that I have confirmed to him that our two nominees have not been invited for any screening.”
On the implications of the non-constitution of the parastatals board, Wabba said: “ The implication is that if the relevant bodies like the Central Bank of Nigeria and NLC, which should be on the board ensure that procedures were followed and funds are also secured have not been there, they cannot be able to confirm what has transpired. The functions of the NSITF board are statutory in nature because it is an Act of Parliament, which means these actions or oversight functions that ought to have been taken by board have not been exercised. There is no good compliments of good governance. Clearly, I think we need to have the board in place because the NSITF is very important to workers. It is where issues of accidents and workers’ occupational hazards are actually taken care of, including the issues of compensation. Employers pay money to ensure that their workers are adequately compensated in terms of accidents and social security cover .
In same vein, the Chairman-designate of new NSITF board , Mr. Frank Kokori, has also expressed displeasure at the turn of events. Kokori was reported as having said he suspects some insiders are afraid of “the big wand the board may wave once inaugurated”.
“I suspect that they don’t want somebody of high integrity so sit down there to correct what is happening. Maybe my name is what is frightening some people inside, people who benefit from the rot.”
With extension of invitation to the NLC representatives on the board of NSITF to appear for security screening, it is expected that the new board soon take off after inauguration and be able to chat a new course and strive to provide the needed succor to long-suffering Nigerian workers. Notwithstanding the loss in time, an effective board and management team can still make the desired impact.