2025 Budget: Insurers Determine to Grab 25-50% of Capital Projects Funds
Ebere Nwoji
In pursuit of the growth of the insurance sector and enhancement of its contribution to the national economy, insurance industry operators have expressed a resolve to ensure that 25 to 50 per cent of funds for 2025 capital projects in the budget got to the industry as premium.
The operators said that would happen through their efforts in ensuring that all capital projects in the budget were insured and the premium collected.
The federal government in the 2025 budget, tagged “Budget of Restoration”, earmarked N49.74 trillion for total expenditure. Out of this, the government earmarked N16 trillion for capital projects.
Based on the huge amount for projects, insurers believed there were a lot of opportunities for the sector in the proper execution of the projects.
President, Nigerian Council of Registered Insurance Brokers (NCRIB), Prince Babatunde Oguntade, at a press briefing in Lagos said insurers would this year, through support of relevant federal government agencies, ensure that relevant insurance laws on execution of the projects were obeyed to the last and premium for the projects paid to the insurance sector.
Oguntade regretted that annually government budgeted for insurance through projects, some of which have compulsory insurance attached to them, but the premium hardly got to the insurance sector.
According to him, that is due to execution of uninsured projects in different parts of the country, whereas the law says such project must be insured.
He said in some cases the projects were underinsured and premium not completely paid.
Oguntade, however, commended the federal government for the N17.3 billion budgeted for the Group Life insurance of its workers this year, saying it is a good start towards meeting what is required.
He said six years ago, the industry was demanding for N22 billion premium for insurance of federal government workers’ group life policy.
He said if such was the right premium six years back, he wondered what the right premium should be at this time.
He, however, commended government for the amount budgeted this year, expressing hope that better things would come in future.
He lauded the government’s effort in infrastructural development and commitment to investing in critical sectors, such as transportation, energy and housing and urged the federal government to ensure adequate insurance coverage for all the projects in the 2025 budget.
Oguntade said insurance helped in mitigating risks and fostering economic growth for major government infrastructural projects, such as the numerous highways and railways currently under construction.
Oguntade stated that government expenditure on construction of highways, railways in this year’s budget was huge and lauded the government’s effort in infrastructural development and commitment to investing in critical sectors, such as transportation, energy and housing.
He added that initiatives, like the National Integrated Infrastructure Master Plan (NIIMP) and the Economic Recovery and Growth Plan (ERGP), demonstrated the government’s dedication to bridging the infrastructure gap in Nigeria.
“I believe that insurance can play a vital role in mitigating the attached risks and promoting economic growth. In executing these laudable projects, we must emphasise the importance of ensuring that these projects are adequately insured,” he said.
Oguntade said the NCRIB Council had been working to promote the development of the insurance industry in Nigeria. He said the council was doing this by engaging policymakers, regulators and other stakeholders to create an enabling environment for insurance to thrive.
The NCRIB’s president commended the National Insurance Commission (NAICOM) on its efforts in promoting the growth of the insurance industry.
He lauded the Inspector General of Police, Dr Kayode Egbetokun, for his promise to commence clampdown of vehicles without insurance on Nigerian roads from February.
Oguntade stated, “This is highly commendable because the efforts would not only increase the industry’s revenue, but also create more awareness on the importance of insurance and thereby create economic security and growth.
“We urge the IGP to fulfil his promise and ensure a zero tolerance to vehicles plying the Nigerian roads without insurance cover.”
Oguntada expressed worry that insurance penetration rate in Nigeria remained abysmally low compared to its teeming population of over 200 million people.
He charged journalists covering the insurance sector to continue promoting insurance awareness and educate the public on its by importance and benefits to individuals, businesses and the nation at large.
