TheNewsGuru

Author: Ifeanyi Ugwuadu

  • TNG Deal Breakers: Why the probe of NHF ought to be XYZ

    TNG Deal Breakers: Why the probe of NHF ought to be XYZ

    Historically, in Nigeria, any mention of abandoned properties takes anyone who knows something to the Biafra returnees’ era. This is not the story I am about to write here because I know little about it except through other people’s accounts presented in books or orally. Most workers in the country are familiar with the Federal Mortgage Bank of Nigeria (FMBN) which has also, functionally, transmuted to the National Housing Fund (NHF).  The National Housing Fund (Establishment) Act 2018 replaced the 1992. The key objective for the establishment of the Fund is to provide affordable housing and close the huge housing deficit in the country.

    If the mandate of the NHF had been worded in another way, like “to provide the environment for affordable housing”, maybe it could have achieved something more laudable and significant. “Mobilization of funds for the provision of affordable residential houses for Nigerians” is thus, the real mandate of the housing agency. The funds are derivable from mandatory 10% investment from commercial and merchant banks’ loan portfolios. 

    The largest chunk of funds should come from insurance companies that are statutorily mandated to invest 20% of non-life and 40% of life funds in the housing sector with 50% of these going directly in the funds. There are also contributions by the Federal Government. 

    The activities of the agency, particularly its revenues and remittances from contributing entities are now undergoing probe by the federal legislature. The NHF is among those federal government agencies whose accounts are notoriously opaque and at variance with any standard accounting governance system.

    What the investigations ought to demonstrate

    Undoubtedly, the legislators have a duty and the right to uncover remittances, revenues and utilization of funds by NHF or other MDAs for accountabilities. Beyond this, they ought to take, as part of this national assignment, the actual disbursements and refunds by NHF to contributors. For, this is where the major problem lies. The true face and identities of housing loan disbursements and refunds in sum and quality need to be established. It must be stated that some officials mount roadblocks and make incredibly difficult, any attempt by contributors to claim refunds after they have qualified for it.  Just a few points to demonstrate the things that should be central to the ongoing legislative inquest;

    1. The current number of contributors to the fund
    2. The average deductions of the 2.5% mandatory contributions from remitting organizations both in the public and private sector
    3. The actual number of beneficiaries, identities of NHF loans, and actual loan portfolio 
    4. The contributors’ refund rate and the number of those the Fund has paid with interest accrued.
    5. The number of dead contributors.

    Number 5 is particularly disturbing because NHF has no system in place to ‘repatriate’ the monies to the dead contributors’ relatives, either for the reason that both at the employers’ books and NHF there is no KYC with a next-of-kin to whom the money would be paid to.

    These questions are vital to unravelling the stonewalling that officials present whenever a contributor turns up to request refunds and why the agency is unwilling to refund. The general impression that one gets from the ‘irritations’ that some of us engender in these NHF officials, is that no one expected you to come. “After all, how much is this money that we are being bothered,” seems to be the general almost nonchalant attitude of these employees.

    For clarity, contributors that can apply for a refund are those who have retired at 65 years, those at 60 and other contributors who are ailing and have no employment. In addition to these are those contributors that have been disengaged, retired and have not been employed for upward of 10 years. The last two categories are granted waivers to apply for a refund.

    How the investigation is going so far

    Accusations and counter-accusations by agencies of government have so far characterized the probe. But more interesting and revealing during the course of the investigation is that the Federal Government, pressed for funds, had dipped its hand into employees’ contributions to the NHF and cornered N11.6billin while another N11.5 billion was yet unremitted from the same IPPIS. 

    Mr Madu Hamman, the NHF boss also disclosed that “another N3.5 billion deducted from the NHF by IPPIS between April and July 2021 is also yet to be remitted to the bank”. Overall the housing bank denied receiving N26.5bn into its coffers from the integrated payroll system which the Office of the Accountant-General of Federation superintends. 

    Total remittances to the National Housing Fund from both the formal and informal sectors between 2011 and July 2023 stood at N591.5 billion. Out of this a total of N347.5 billion was used to “finance the constructions of 158,521 housing units under various schemes across the country.” 

    It is hoped that this investigation is holistic and that part of this exercise should also include a thorough audit of the claimed 158,521 housing units constructed by the agency. The bidding process, quality, type and the actual number of the houses constructed with N347.5 billion. 

    Personal Encounter

    I started my bid to get a refund early this year on the basis of the aforementioned categories. Under the NHF administrative convenience, since my office was located on Broad Street, that is the location to apply for a refund, notwithstanding where I reside. For instance, if I retire to my village and am unable to travel the distance, I should be able to persuade myself that I have lost the money to an unclaimed pool which NHF is not known to account for.

    During the back and forth, I learnt that most remitting companies did not procure ‘passbooks’ from NHF to record monthly deductions from each staff. It is this passbook, signed and stamped by the organization that the retired employee is expected to take to NHF to apply for refunds. Incidentally, I didn’t have this passbook and had to procure one and after that take to my last employee to record all those monthly deductions.  This is not the end. This is actually the starting point as another back and forth begins with NHF claiming they are unable to locate the receipts and if actually your organization is certain that they remitted, then they must attach evidence. While my employer filled the passbook and totalled my nearly 5 years contribution at a little over N100,000, NHF said it was not up to that figure. While I left the NHF due to their deliberate designs to frustrate my refund, I woke up one day to see a credit notification of N78,000 (approx.).

    What I could deduce from all these after many trips to Marina office the Federal Mortgage Bank of Nigeria (FMBN) or simply the NHF is that, head or tail, some amount must be sliced off the little amount that is left in your contribution balance. Besides, you are never to get any interest in it! Many contributors have abandoned any effort to take their money.

    So the scheme is designed as a Scheme; small deductions each month that you may never bother to think about. At the end of the day, it’s money to fund all kinds of government appetite for free funds. The organized labour seems indifferent to this and the NHF conveniently shies away from mounting a public campaign for the rights of contributors. Fortunately, no matter the intendment of the federal legislators, the scope of its probe would continue to expand until it is drilled down to those who perpetrated the national heist against the working masses. Every contributor must have his eyes on the legitimate contributions he has made to the NHF and demand settlement at the appropriate time. The system must now respond to the robust and varied digital payment system and make it easy for individuals to make claims without the deliberate distance created by an analogue operator.

  • TNG Deal Breakers: Gifting, bequests and endowment solutions for family needs

    TNG Deal Breakers: Gifting, bequests and endowment solutions for family needs

    We all agree that someday, we shall pass away! Death is, therefore, inevitable.  There is also another certainty that we do not have the luxury of being informed when any of us reached this final point. Thus, the best part of life is lived when we live each day like it is the last day. Today is the best day to bequeath or endow. Children come with a great deal of exaction on finances on couples’ earnings. Insurance savings through savings endowment policies have proven to be the most affordable means of saving up for children’s tuition, books and other essentials when they grow into school age.

    For instance, when a child is born today, an educational endowment could be taken in the named child after the year’s birthday. Based on the earnings capacity of the parents and the category of education desired by parents for the child, a 10-year plan targeting the final years of college and all through university could be purchased. It may also excite some parents to buy insurance for the formative years of the child and pay from primary school and through other levels of education.

    Notwithstanding the economic difficulties, endowments can serve other purposes – which essentially solves the problems the policyholder intended despite his absence due to death. Often the major challenge that prevents many people from embracing endowments is the tie to death benefits whereas most forget a significant proportion of those who buy endowments cash out while still alive and enjoy the benefits with the named beneficiaries.  

     Rebecca Lake writing in Forbes Advisor states, “Endowment life insurance is designed to offer a payout to the policy’s beneficiaries when the insured person passes away or to the insured person at the end of a set period. An endowment life insurance policy can act as a savings and investment vehicle.”

    Right fit for individual needs

    The Nigerian economic environment is peculiar as well as daunting. Education takes a large slice of the typical family income. Both children and parents are constantly demanding a portion of their earnings for education. For parents, it is a continuous quest for knowledge, self-improvement and career enhancement.  Therefore, parents can start an endowment for their children after their first anniversary. However, depending on an individual’s financial situation and needs, term life insurance or a permanent policy might be more appropriate.

    The act of gifting itself is an expression of the love we share with others, particularly our family. It is also a demonstration of the care and responsibility we owe to the ones concerned. Insurance simply serves as the best tool to do this. Ideally, this kind of planning frees funds when you want to invest in self-improvement in future because children’s education, family health and a few others have been taken care of. 

    Without exception, all Nigerians are confronted with, at least, one material challenge or the other that requires fixing. But the cycle of everyday living has rendered many people incapable of seeking alternatives to solving these problems except to plunge headlong into the vicious cycle. As schools reopen, the rat race for school fees begins again for most families with the additional burden of the high cost of living. To ask any parent at this time to take out education policy for children will be a tough call. Yet this remains the only viable planning tool in a despondent economy.

    Endowments allow the policyholder to cash out at maturity. This type of life insurance functions on multiple benefit levels – funding death benefits, cash out at maturity to the insured, payout to named beneficiaries, and accumulating savings. Depending on the age of the policyholder at inception, the premiums tend to be higher for shorter terms (like 5 years) and less if the term is more prolonged (like 20 years or more).

    Due to low returns on investment and unstable macroeconomic variables, it may be advisable to take five years of saving plans at a time and roll over for another term if desired. Yesterday belongs to the past, today remains the best day to start. If your child is 5 years, you will be in the position to congratulate yourself if you start putting together an educational endowment together so that in the next 10 years, funding university education will be less challenging for this particular child.

    Bequeathal

    Aside from endowments which may be accessed by the policyholder at maturity or the end of the savings period, bequeathals can be tied to organisations where one wishes to save up money and donate large sums either for charity, a cause or r the family after the policyholder passes away. Many people feel obliged to their communities, religious groups, family groups or indeed to individuals and families. These affiliations to a cause or love for a society where one belongs may form the basis of leaving a legacy. In the long term, this type of insurance helps the policyholder accumulate enough funds to execute his wishes.

    The Right Time

    Oftentimes, we do hope that our plans kick start at the right time. Despite the parlous state of the economy and most individuals’ finances, the right time is now. Begin with the family unit – think of education, family life after the breadwinner is gone. Think of the sustainability of children’s education, of their access to good health and other necessities when the provider is no longer there. Now is the right time!

  • TNG Deal Breakers: A Mass for mass burial – the #EndSARS Endgame

    TNG Deal Breakers: A Mass for mass burial – the #EndSARS Endgame

    A Hundred and Three ‘only’ is now the official death toll of the #ENDSARS victims who will now be accorded a mass burial. Before now a long list of properties destroyed during the protest have been rebuilt. Pen Cinema Police Station is one such property that is a one-storey building testifying to the priority of the State. But for the dead, “picked up from various parts of the City (of Lagos, not Lekki), they will not be mourned because they are deemed to be non-essential. After all, until now the official position had been that nobody died in the course of the protest. And those who claimed otherwise were challenged to provide names of the dead. Since they couldn’t provide names, the faceless dead will now go six feet, nameless!

    And in the register of insurance, only some properties were insured and these also have been settled. Conventionally, insurance does not cover civil commotion and riots as these are on the exclusion list. However, these may also be covered under special peril cover for those who opt to be covered in case they suffer damage during riots and civil commotion. Like most mass deaths in Nigeria, the victims are not covered by insurance simply because they didn’t buy any. But does this absolve the State of liability? Not at all! The Nigerian government and the State government owe some compensation to victims’ families. Perhaps, this may be the reason they would be interred nameless so that government will escape financial culpability.

    Now that the endgame has come for the blame game of #ENDSARS, and after counting the material costs and losses excluding the human life (for human life counts for less in our world here) maybe we begin to ask questions about State responsibility towards citizens as enshrined in the Constitution. The time is now to hold accountable government officials for negligence in protecting human life. A hundred and three persons dead in any one event is a massacre. Already, we derive that from the various reports that occur around the earth; “Four dead in the US mass shooting” tells the story differently but captures how in Nigeria we have regarded this life given to us.

    About my Friend at the opposite end of the Earth

    Some 15 years ago, my friend and brother who travelled to Italy to seek greener pastures returned home for the first time. In the course of our trying to catch up with the time spent apart from each other, I asked him what happened to him with scars all of over him with teeth wired together. He narrated to me a near-fatal accident he had while going to work with a friend. He told the story of his survival and the lots of money paid by the Italian government as compensation to him and others involved. For any accident on Italian highways, the government pays compensation to victims on its insurance for that purpose, he explained. I was amazed to hear that a Nigerian immigrant could be afforded such coverage in a foreign country where he is not even a citizen but just a legal migrant worker.

    In our country, Nigeria, this would be like a daydream if it ever happened. Yet like all other countries established for the sole purpose of the citizens’ welfare and security, which are incumbent on governments to provide, this is nowhere in place. Had this been in place, governments in Africa would be more responsive and responsible. Imagine the Nigerian government having to pay compensation for the 103 officially acknowledged victims of the #ENDSARS protest, and indeed all other deaths caused by its inability to secure the life and property of her citizens, and the ministers in charge held accountable for the economic losses to the nation, they will do more to do their jobs. They would not dare to say, dead citizens were “picked from various parts of the City”: The dead being described like heaps of litter that obstruct roads that waste managers pick up!

    Fat too many are these ‘litters’ of human lives lost to the worst kind of violence meted out to fellow citizens. It is time to pause and take stock so that we can live lives worthy of our humanity.

    Imperatives of Civil Society Actions 

    The march towards greatness in any nation entails absolute consideration for every citizen and resident in that country. Often, civil society groups sue the government for one failure or another, either to raise awareness or pressure the government to act in the public interest. These actions often come to nought. However, it could bear more import and win a greater following if these court cases have the human element whereby the State is sued for negligence—for instance, the current ENDSARS, the CHIBOK kidnap and many more. The system has so impoverished a large swathe of the population that even those who can afford insurance, no longer have the means to pay premiums. Therefore, a civil society action can demand that government should take a global insurance policy that covers large parts of the population so that it can afford to pay compensation when the need arises.

    Palliatives that target the support systems of the economy instead of cash donations, will have a far-reaching effect, which is more impactful than the current efforts. Currently, civil society actions are not sufficiently embracing, thus leaving out the most vulnerable and critical population. Unable to defend themselves against any unfavourable government policy, these Nigerians are left to vagaries of policies that gradually squeeze life out of them.

    Commercial insurance is meant for those who can afford to buy cover for their assets. Although insurance is still the cheapest tool for protecting valuable assets, in Nigeria disposal income is hard to find in an economy that is pro-consumption. The gap ought to be filled by national insurance policies, like flood insurance which allows the government to respond to claims of citizens for compensation when the need arises

    The Future

    The future is already here with us– there would be more food shortages, flooding, pandemics and a lot more destructive events. Nations survive these events through modelling risk scenarios and planning for them. Insurance is typically one of the most important tools for planning against uncertainties (or certainties as occurrence today demonstrates) and recovery when they do occur.

    The first line of protection planning is safeguarding human lives. Both government and individuals ought to take necessary steps to minimize the loss of lives. The premium we place on the life of Nigerians will change who we are today as a people. It is the duty of the government and all well-meaning people to address the value of human life and its dignity. And if the government is not responsive enough, groups can organize to buy protection for their members.

    We must not just invite one Imam and Clergy to officiate a mass burial of Nigerians, let us give this event a name, and raise a monument and epitaph, which reminds us that we lost Nigerians through a government’s wrong response to protest and civil unrest.  In addition, let us use this event to ask the government to invest in human lives. An N250 billion National Shield Policy that provides for those who cannot afford insurance may be a starting point to start building resilience for the country. Of course, this measure does not preclude national emergency planning.

  • TNG Deal Breakers: We could all be saving to save our economy –– the insurance way

    TNG Deal Breakers: We could all be saving to save our economy –– the insurance way

    Let’s say 10 million Nigerians, both from the formal and informal sectors, are incentivized to save N10,000 monthly; this would give the economy N100 billion each month and N1.2 trillion in a year. In five years which (in economic terms is a medium-term) this comes to N6trillion. Pretty simple, isn’t it? If the government says to savers in the formal sector, for every minimum N10,000 life insurance savings, you get a 5% tax cut on your yearly income tax. For savers in the informal sector, the government matches similar savings with 10% of their monthly savings paid directly to the saver’s retirement savings account.

    In this scenario, these incentives draw a sizable population of the informal sector into the retirement scheme while also boosting the numbers on the insurance savings plan. Not just boosting the numbers but energizing an army of savers that would draw in others the moment it works.  The most significant beneficiary of this incentivized savings is government itself, the banking system and the entire financial system. Indeed the economy will reboot faster and create more job opportunities within the first five years of this medium-term national savings plan. Thereafter when trust in the system is established, individuals can confidently take up to 10-year plans or 15 years as the case may be. Trust is the key.

    The savings culture has a long time ago been eroded by policy inconsistencies of government. If it wishes to restore confidence in the system, the first step is to give incentives through tax cuts or direct counterpart monetary payments to those who will commit to it. And the 10 million target population is certainly not difficult.

    The beauty of saving the insurance way is that it enforces discipline and prevents the saver from taking a little out of his account every now and then. And the most important advantage is the life insurance it provides while you are on it. So, your saving has multiple benefits interest on savings, guaranteed sum assured at maturity, life assurance and opportunity to contribute towards national development while profiting from your participation.

    The Critical Currency

    The highest currency to achieving this target is the belief system. The value system has to be restored through a governance structure prioritising accountability, transparency and the rule of law. This then is the basis of a productive economy because long-term investable funds would be available for the government and investors at a more profitable lending rate. Incidentally, insurance thrives on the basis of trust. The Nigerian government must then begin to build this most important currency which is actually faith-based. If there is integrity and government is conducted with the utmost respect to citizens and equality to the law, then we can trust the various systems that drive the nation’s activities.

    Insurance is a trust instrument and thrives when all other components of equity, social justice and transparency become the mantra of leadership at all levels. Based on the already stated foundation for insurance, we all can save up and trust the system to deliver, in due course, the things that have been entrusted to it. In addition to that, endowments and bequeathals can fill up planning spaces that are lacking today, thereby saving families from poor planning for children’s education, health and asset protection.

    Why a national savings policy and incentives?

    Fundamentally, it is important to save the insurance way in spite of the inflationary pressures on savings because only insurance has the capacity to pool long-term funds. The national policy perspective to it is that government can guarantee its success by backing the instruments that insurers roll out. 

    The late 19900s (between 1997 to 2001) shows how difficult insurance savings products could thrive in a low-interest environment. This was for mature markets in Europe. For instance, to prevent absolute failure with increasing insolvency recorded during the period, the Japanese government intervened to guarantee the liabilities of the life insurance market. The Japanese government could act in this way as the ultimate guarantor of the life insurance market in order to shore up confidence in the insurance instruments. If there is any sector where subsidy is most needed, it should be the insurance life products aside from agriculture. Insurance offers the cheapest and most versatile broad-based tool for planning in any given economy. It lets government concentrate on macro-economic policies, infrastructure development and maintenance.

    A need for caution and increased disclosure

    While it is good news that insurers still find prospects for their life insurance products among the disillusioned population, there is a need for regulatory oversight. It is good that a significant number of Nigerians want to invest their savings in interest-yielding instruments, however, it is incumbent on the sellers to advise carefully on the likely impact of macro-economic variables like inflation on the expected sum insured which, in some cases has a tenure of 5 years or more.   

    Insurers have come to terms with a low-interest environment, which requires them to offer well-designed interest rate guarantees that is as competitive as it is realistic.  Making promises that are not supported by the current economic variables will further corrode the weak reputation of the insurance industry. For instance, there was a report crediting an insurance executive with a statement that promises N1 million life cover for a savings plan of N5,000 minimum monthly contribution with “two years tenure and competitive annual interest rate”!

    The conservative nature of insurance makes this offer awesome but at the same defies the prevalent yield in the investment environment as well as the federal rate.

    To combat the obvious austerity measures and the high cost of living, companies might make a difference by filling the gaps that the cuts to social welfare systems leave behind. With simple and low-cost health products offering hospital access in worst-case situations or simple-term life products offering protection for dependent family members, the insurance industry can make an essential contribution to address the present and future challenges that our country is already facing today.

  • TNG Deal Breakers: Export losses denting Nigeria’s image, curtailing entrepreneurship and solutions

    TNG Deal Breakers: Export losses denting Nigeria’s image, curtailing entrepreneurship and solutions

    Commodities, agricultural and food products are Nigeria’s forte or should be the real mainstay of the country’s economy given the vast cultivable lands and the markets for exportable packaged products. The rejection of Nigerian exports by oversea buyers has for long been one of the sorest points in the quest to earn more revenue from non-oil products.

    What more can afflict the confidence of a producer than that his products are rejected by the same buyers who ordered them? So many questions to ask, but the major problem lies in quality assurance, pre-shipment testing and certification and export packaging. To be queried also is the quality of personnel and instruments, pre-shipment conditions and certification. For packaged products, are samples not sent to the ordering party prior to exports to ensure adherence to specification?

    The Nigerian Export Promotion Council and Nigerian Export-Import Bank have a duty to address these serious lapses that have bedevilled the country’s businesses from flourishing in the export of finished goods. It should be blame game over for those agencies of government that have treated this matter with levity.

    Projected to earn about US$ 30 billion by 2025, the non-oil export has performed woefully due to the authorities’ negligence in dealing with buyer concerns overseas.  The Nigerian Export Promotion Council (NEPC) attributes this failure to inadequate training and exposure to export business in the international market and recommends export business training for those who wish to venture into it.

    Export credit insurance and loss mitigation

    Inasmuch as Nigeria is not planning to reinvent the wheel, export trade has a procedural template that works for other countries. Insurance is key both to import and export and meeting buyers’ demands is not rocket science. If an exporter, particularly of agricultural products has received a genuine order for products, it means the product as presented to the buyer is good enough. The problem of rejection by the buyer is a solution covered by an export credit insurance policy.

    Export credit insurance provides protection against delayed payments or non-payment by buyers while trade credit insurance protects the exporter from the risk of products not being paid for as well as providing guided information from industry experts which is key to successful trade.

    This facility provided locally by Nigeria Export-Import Bank (NEXIM) is put in place to encourage exporters to diversify their export markets without fear of the risks inherent in dealing with new buyers. It is also meant to win new enterprises into the export business. In a competitive international market, the insurance policy encourages exporters to ship products on credit.

    According to NEXIM Bank, “export of goods wholly or partly manufactured in Nigeria and export of commodities, which are exportable under the laws of Nigeria,” are eligible for this credit insurance provided such exports are backed by contracts of supply.

    Insurance cover types

    There are mainly Pre-shipment covers and Post-shipment covers. Under most conditions, the two are issued as one policy covering pre-shipment and post-shipment risks. For goods not accepted by the buyer, NEXIM absorbs 68% liability. So the worrisome rejection of goods from Nigeria is almost 70% solved with an export credit insurance contract.

    “If the cause of loss is non-acceptance of goods, the liability of NEXIM is limited to 68% of the loss or of the GIV, whichever is less”, the NEXIM policy assures.

    The Ministry of Foreign Affairs is present in over 100 countries and most of the country’s embassies is staffed with economic attaché. This usually offers countries opportunities to leverage export from their home country because being physically present enables them to report back to export groups the existing standards and quality of products demanded or sold in those countries.

    It may be official inefficiency that could be blamed for the inability of Nigeria’s exports when viewed against the background that many countries around the world not richly endowed with natural resources such as Nigeria have transformed their societies through export trade.

    Both Ministry of Foreign Affairs and NEPC table the same excuse of denial of market access all the time without really exposing the quality of the same products sold in the countries where buyers reject Nigeria’s products.

    Post shipment losses

    Since most complaints centre on post-shipment rejection at the export destination, the government agencies should then work with NEXIM to work out an appropriate quality pre-shipment inspection strategy to avoid dampening the entrepreneurial spirit of exporters. Thereafter, deal extensively with the commercial risks attendant on exportable goods, particularly, agricultural products.

    The commercial risks covered include;

    ∙         Payment default due to buyer insolvency

    ∙         Buyer’s refusal to accept the goods dispatched which conform to contract specifications. Indeed this aspect has been a source of concern to many Nigerians – even when goods conform to standards from the buyer’s country, products are still rejected owing to the largely exaggerated corruption image of Nigeria – the labelling and profiling of anything Nigerian.

    However, in the event of non-acceptance of goods, the export has a waiting period of “one month after the date on which, the goods have been resold or otherwise disposed by the exporter”.

    NEXIM also covers political and economic risks which sets off a “general moratorium on payment decreed by the government of the buyer’s country” and “any other measures or decisions of the government of a foreign country, which prevent performance of the contract.”

    Up to 85% of losses of the Gross Invoice Value (GIV) are covered in both commercial and political events at export destinations that lie outside the buyer’s or seller’s control and occur outside Nigeria. Where a trade dispute ensues due to the liability of fulfilling the contract terms, the dispute shall be settled between the exporter and the buyer before NEXIM will consider a claim.

    Collaborations

    Undoubtedly, there is no lack of entrepreneurs ready to explore the export business but the government needs to show seriousness in addressing the major hurdles of competitiveness in all parameters – pricing, quality, delivery and appropriate business intelligence across countries where Nigeria has a presence.

    Certainly, it is good news that the National Agency for Food and Drug Administration and Control (NAFDAC), is worried by the rejection of Nigerian exports and the attendant financial loss by exporters. Prof. Mojisola Adeyeye, the DG should also be informed that collaboration with NEXIM and other export credit insurers is key to solving this problem to encourage exporters.

    At a recent event, the NAFDAC DG promised that “the rejection (of Nigerian exports) in some European countries and the United States of America may soon become a thing of the past if collaboration between the agency and other government agencies at ports is strengthened”.

    Aside from the “deplorable state of export trade facilitation for regulated products leaving the country” and strengthening regulation of export-packaging, pre-shipment testing and certification, insurance must play a key role to reduce export product losses by businesses. Experts in export credit insurance ensure that all the precautions are taken before they issue policies for export risks.

    Therefore, while sensing the call to duty and the necessary initiating of collaborative activities with government agencies at the ports, “to ensure goods are of requisite quality and meet the regulatory requirements of importing countries and destinations, do extend this to export trade insurance so you have the entire picture.

    It is pertinent that the full list of collaborators comprising NEPC, NAFDAC, NEXIM, Customs and other stakeholders come together to make our exports good economic ventures.

    Incentives

    Many deals are initiated and concluded at trade fairs and thus, participation at NEPC-organized training courses, symposia, and seminars is essential. The Export Development Fund (EDF) Scheme was set up by the Federal Government of Nigeria under the Export (Incentives and Miscellaneous Provisions) Act CAP E19 Laws of the Federation, 2004 to provide financial assistance to exporting companies to cover part of their initial expenses with respect to export promotion activities.

    These initial expenses include advertising and publicity campaigns in foreign markets. The entire bouquet of support granted by the EDF should ordinarily take care of the worries raised by all the agencies charged with facilitating export including the foreign affairs ministry.

    The Export Development Fund, if really funded should provide “support for MSMEs exporting companies to undertake conformity assessment in the areas of Packaging, labelling, Standardization, Accreditation, Testing, Metrology, (traceability and calibration) Quality Certification, including ISO Management Systems (QMS ISO 9001, EMS ISO 14001 FSMS ISO 2200, OHSAS 18001 etc.), Fair Trade, Halal, Kosher, FDA and other relevant certifications etc.

    To support MSME in the areas of pre-shipment quarantine issues such as standard and regulation, best agricultural practice, including post-harvest handling and Sanitary and Phytosanitary (SPS) issues.”

    Looking at the array of support that the EDF provides, there can only be two issues that cause the rejection of our exports – qualified personnel providing quality assurance guidance and funding channelled at real exports.

  • TNG Deal Breakers: NAICOM’s intervention in commercial rating: an avoidable entry into the ring

    TNG Deal Breakers: NAICOM’s intervention in commercial rating: an avoidable entry into the ring

    The regulatory oversight function which framed the 1997 Act that birthed the National Insurance Commission did not envisage that regulator would one day begin to inch towards making itself a party in the insurance contract by setting rates for the purely commercial transactions of insurance companies. The law only recognizes the commission as an arbiter in cases of complaints brought to it by the policyholder in a contract dispute. By insisting that insurers implement a motor insurance rate and at the same requiring all insurance contracts to have a NAICOM policy number in addition to the insurers’ policy number, it has dragged itself into play.

    The two words that empower NAICOM’s crucial intervention powers in the ordinary insurance business are ‘approve’ and ‘establish.’ Certainly, the leadership of the Commission should be concerned about issues of unhealthy competition, underhand dealings and other malpractices in the industry. However, its instruments of supervision through the inspectorate division empower it to have access to the books of insurers. It has not been stated clearly what value ‘NAICOM ID’ adds to a policy issued by an insurance company.

    Now, NAICOM gravitating towards becoming a party in the insurance contract is exemplified in the commercial motor insurance new rates where it has set 5% as the commercial rate for comprehensive insurance. In addition, it has also superimposed a parallel policy number (NAICOM ID) on all policies issued by insurance companies to policyholders. These are avoidable offside regulations and the basis for these are not clearly stated. One part of the reason said to be adduced by NAICOM is the worrisome deterioration of rates in the market and the need to track such policies. Ordinarily, these concerns can be sufficiently addressed by technology.

    How the Law Sees NAICOM

    The National Insurance Commission Decree No. 1 of 1997, (although needing massive amendments) set out the functions of the agency thus; “the principal object of the Commission shall be to ensure the effective administration, supervision, regulation and control of insurance business in Nigeria.” And these comprise the following principal areas of its activities;

    ▪  “Establish standards for the conduct of insurance business in Nigeria;

    ▪  approve rates of insurance premiums to be paid in respect of all classes of insurance business;

    ▪  approve rates of commissions to be paid in respect of all classes of insurance business;

    ▪  ensure adequate protection of strategic Government assets and other properties;

    ▪  regulate transactions between insurers and reinsurers in Nigeria and those outside Nigeria;

    ▪  act as adviser to the Federal Government on all insurance-related matters;

    ▪  approve standards, conditions and warranties applicable to all classes of insurance business;

    ▪  protect insurance policyholders and beneficiaries and third parties to insurance contracts;

    And then, “carry out such other activities connected or incidental to its other functions under this Decree.”

    Can it be said that decreeing a commercial rate for insurance business is incidental to the above-enumerated functions and powers of the Commission? Certainly not in this case! The law clearly uses the words – approve, establish and other such words appropriately to set off the types of incidental governance corollary to the regulatory roles of NAICOM. Simply, it means that an entity other than the Commission must approach it for approval. In this instance, the body of insurers or reinsurers should agree on rates based on the market experience and then go to the regulator for support.

    Although the Motor Third Party Act of nearly a century requires a reworking to reflect the times and the environment of today, still it remains the law that spells out the commercial rate of 10% for comprehensive insurance. In the 40s and 50s of that period, the number of vehicles on the roads is very few and majorly new cars. The ‘tokunbo’ or used cars of today were strange to the law. However, with a higher volume of vehicles and a profitable portfolio, the rates ought to go down. At 5% or half the established legal benchmark, NAICOM seems to have vaulted the game at the expense of the players themselves instead of allowing itself to approve and supervise the outcomes of market agreements.

    Motor as compulsory insurance

    The area reserved for NAICOM, even with input from the industry practitioners, to set rates is compulsory insurance and motor among such. Based on the accident experiences in the country and increasing third-party claims on motors, the regulator had rightly increased the rates. But it went overboard to fix commercial rates that are dependent on individual underwriting company’s portfolio mix and experience as well as overall market experience which are both historical and present. Where a negative market experience supersedes that of an individual company’s experience, a possible rate increase is agreed upon and the regulator is approached for approval.

    It should have been the place of NAICOM to bring more vehicles into the net through the enforcement of compulsory insurance as the agency of government empowered to carry out such activity. Instead, it prefers to pass the financial burden to individuals and corporates whose vehicles are already insured.

    Expectedly the revolt against the hike in commercial rates portends to be phenomenal. The Q1 industry report which is being awaited will prove if the right decisions had been taken in this respect.

    Insurance Profitability and Motor

    According to NAICOM’s insurance industry Q4, 2022 performance report, “the market recorded 47.2% net loss ratio during the period under review, suggestive of a workable, cost-effective and profitable business in the industry. This is mostly attributable to the Life business sustaining its positive course at 46.5% net loss ratio in the current period while the Non-Life portfolio recorded about 48.1% during the same period”.

    “Motor Insurance continued its lead as the highest retained portfolio with a retention ratio of about ninety-four per cent (93.5%) also a point higher than its standing in the prior quarter”’, the report noted.  Although Motor Insurance at 14.9% premium output of the total last quarter result, lagged behind fire and marine and aviation class, it still posted overall best in terms of portfolio profitability in the non-life category.

    Undoubtedly, both NAICOM and underwriters need to keep a close watch on the motor business with a view to identifying the fleets that mostly account for the large claims payout and deal with it at the commercial level and not at the wider market level. The ripple effect is the price resistance that companies and individual motor policyholders have demonstrated.

    During the last quarter of 2022, motor insurance led in claims settlement which the regulator attributed to consumer awareness and market expansion. Increased claims pressure arising from awareness should not be the basis for increasing rates. Rather, it should serve as a brand-building and consolidation tool for the industry and subsequently help to bring the uninsured to the table.

    A Step at a Time

    In order to stem the tide of growing resentment by a larger swathe of motor policyholders, NAICOM may consider convening an industrywide meeting to discuss and agree on a minimum base price for motor and other rates that are considered uneconomic for the market survival. Starting at 3% would be ideal for individual car policies while fleets may vary at between 2.5% and 3.5% depending on the claims experience of each underwriter. Competition often enforces a rating that is premium income-based rather than a mix of claims experience and portfolio premium mix.

    The fact that many underwriters were taken unawares or a confirmation that there was no concrete agreement between insurers and NAICOM before the new rates became effective, is indicated by the many variants of 3rd party and flexible comprehensive insurance being churned out by insurers and the regulatory approval for them. If the regulator could bend over backwards to accommodate these hasty measures that have the potential to suck the motor business the more, in conjunction with players, it could have taken a step time – devise a strategy to enforce motor insurance compliance, agree with insurers on small steps to curb anti-market rates, agree 50% or so increase on 3rd party and then adjust the commercial rates, if necessary, to the minimum proposed here.

    Moreover, when all the steps have been taken, a robust and efficient communication strategy would then be deployed to win the consumers’ confidence in the plan through a cost-and-benefit rationalization campaign. The value added to the price increase ought to be communicated unambiguously.

  • TNG Deal Breakers: This isn’t insurance!

    TNG Deal Breakers: This isn’t insurance!

    Pensions, Social Security, Workmen’s Compensation, cargo insurance and bonds were once the exclusive turf of insurance underwriting. These are now history as the new normal is the insurance of things by subterfuge and undertaking. Underwriting no longer requires a certified professional but the deployment of artificial intelligence known for short as AI.  Previously complex underwriting calculations are now made easier through AI. Even the less complex risks have calculators deployed to insurers’ websites for the convenience of buyers as well as proof of transparency in the premium equation.

    For the advanced markets, AI and emerging insurance technology or insurtech are seen as gateways for convenience mass selling, cross-selling and the canvass for mass appeal for the technologically-driven world’s markets. And for the less developed markets, it has become the platform for the underserved, unreached and uninsured. In addition, it has also become the window through which many non-professionals wish to enter the hunt for premium, albeit through the backdoor.

    Insurance comprises first underwriting the risk, then the investment of the premiums and the paying of claims. This presupposes that the practitioner first sees insurance as asset protection and assessing risk and what is insurable. This has changed! Those challenging the status quo see the premium first and then the risk after a loss crystallizes.  Thus, a situation is set where over-regulation may come in as an arbiter for the professionals, who are fast losing grounds, and the army of businesses deploying technology to cultivate and win the mass market.

    The Game Changes by leaps and bounds

    Although insurance remains relevant since the 2004 Pensions Reform Act that altered the exclusive domicile of pensions in the insurance market, the loss of huge investable funds and accruable revenue therefrom has been a drain on its growing capabilities. The math is simple enough – just add more than N14 trillion in retirement savings and the loss to insurance is clearer. The social security fund, NSITF transformed itself through an enactment that replaced Workmen’s Compensation previously in the insurance domain. It is now known as Employee Compensation Scheme managing over 100,000 employers’ payments into the scheme. Though framed in the mould of insurance service, the establishment does not report to the insurance industry regulator, the National Insurance Commission (NAICOM)

    Worrisome trends

    Beyond the loss of market by insurance through altered legislations and the underreported amorphous regulatory controls, the most worrisome dealings is the deliberate balkanization of insurance offerings and the consequent loss of actual revenue. If not curtailed and the risks of the surge properly assessed, more reputational damage may confront the insurance industry.

    Import ‘Form M’ filing, insurance bonds and bankers’ conflict of interest

    Take, for instance, the opening of Form M, a banking and customs requirement for the importation of goods into Nigeria. The bankers have captured this formal procedure for their own benefit. The importer is forced to insure the imports through a bank-owned insurance company or where it has a revenue-earning interest. The brokers are thereby eliminated and insurers are short-changed. In the long run, after the customer has been forced to take insurance from a predetermined underwriter and claims occur, the whole industry’s reputation takes a hit when a claim is perhaps repudiated.

    A cardinal principle of insurance is choice. After taking a decision to transfer risk to insurance, the buyer must also choose which insurance company he prefers when all the facts of the matter have been placed before him. The consumer should not be goaded to make a preference that runs counter to his business interests. The Form M opening is just one of such many cases, where individuals, enterprises and groups use their process points unfairly and, thus creating conflicts of interest that pass through regulatory oversight. In most cases, these imports are not funded through any form of bank loans but simply on account of process compliance for imports, the banks are forced to play an unwritten condition.  This is undoubtedly an antitrust situation which may be unknown to CBN.

    Various types of risk bonds are issued both by banks and insurers. However, the underwriting of contract surety bonds is done by the insurance market. In terms of revenue, banks rake in more from their financing outlay while transferring the risks for disproportionate premiums paid to underwriters under a deal brokered by bankers themselves. Performance bonds, bids and payments bonds rank among the most popular in the contracting business. In the event of failure, the insurers pay the claims to banks for the failure of a deal they brokered in addition to pocketing part of the premium. Perhaps, I shall devote more space in future to explain bond parties and how this has been taken over by the banking system.

    Professional Indemnity

    Professional Indemnity (PI) is a requirement for professionals. It indemnifies those who suffer from professional negligence. For instance, if institutions were effective, the builders and other professionals who take on contracts for the planning, costing and erection of buildings must have an indemnity policy such that in the event of an accident, compensations will be paid. That this policy is not demanded to prequalify these professionals despite the frequent building collapse and loss of lives shows the weakness of the governance structure of these institutions.  The insurance industry should not wait for a day to come when professional indemnity will be tucked away, like others, as amended legislation into one Act and shipped away from the market.

    The medical profession’s mandatory professional indemnity which is enforced indirectly by the National Health Insurance Authority (NHIA) requires that healthcare workers get their PI from only approved insurers, thereby flouting again a major principle of choice-making. This is a situation which should have raised red flags and allowed NAICOM to trigger an inter-regulatory investigation to put a stop to it. The same with the already cited case of Form M opening import procedure. The CBN would have intervened to stop the bank-induced purchase of cargo insurance from preferred insurers. It would have been necessary for the CBN to investigate how this anti-trust transaction is being perpetrated.

    The weakening of insurance through a deliberate capture of its role in the economy without at the same time fulfilling the task of insurance is partly to blame for weak infrastructures and efficient funding of growth structures of the economy which is the SMEs. Without low-interest loans accessible to SMEs, the economy will continue to stutter. And while pensions may have large swathes of cash, it may not have the knowledge base to fund these growth sectors because the portfolio mix is haemorrhaging via the different independent establishments and regulators performing supposedly insurance functions. The aggregation of risks from various financial and insurance-linked instruments, which is fundamental to deciding risk vulnerabilities and weighting investment appetite is unavailable to all parties. Neither to insurers, banks, pensions nor any similar organization dealing with these issues.

    While the main purpose of this article is to highlight the various anti-insurance schemes in Nigeria’s economy and point to fair reporting of these earnings by the various entities under the heading, “insurance commissions”, it is also intended to alert all stakeholders to the dangers of further weakening of insurance growth. The investor interest should not only focus on making large profits over the short term build on building a revenue base over the long term. The insurance regulator should also do more to interface with other regulators to curb further unfair practices.

  • TNG Deal Breakers: The Labourer deserves his wages and more

    TNG Deal Breakers: The Labourer deserves his wages and more

    May Day is for children what May Day is for workers – one is celebrated on May 27 as Children’s Day while May 1 is Workers’ Day or Labour Day. To mark the day, workers hold rallies across the globe to highlight the plight of workers as the real producers of goods and services and the challenges of government policies, safety at work and unbridled profit-taking by investors. In the era of proletariat and bourgeoisie, these two ideologies are well understood but in capitalist ecosystems, the worker and investor dichotomy is not well delineated. In the capitalist systems, everyone claims to be a worker, both the business owner or employer and the employee. The International Labour Organisation as a UN agency highlights the importance of human labour in the workspace.

    It will be difficult to really separate the concept of the worker as one who performs a task for wages from the investor who also performs tasks to receive wages plus dividends from his investment. Both are engaged in some form of work.

    Appropriate wages, salaries and other benefits for workers will continue to dominate debates and pitch employers against employees as long as this relationship is not strengthened on a symbiotic basis. Either the investor wants to take more profit or the employee deems his work not properly remunerated and pushes to get an enhanced paycheck. Whichever side anyone inclines, the labourer, including the investor, deserves his pay.

    In the overall interest of the worker, additional benefits have been built into the welfare package offered by many firms, some according to legislation, others by virtue of labour conventions and agreements. Beyond the demands for appropriate weighting of labour input and wages, job security arising from automation and artificial intelligence are the real challenges of human labour today. Fortunately, despite the fear generated by new technological inventions, human hands and supervision are as important as the machines that purport to replace humans in the workplace.

    Although research into the impact of AI on the labour market is ongoing, preliminary results indicate more jobs being unfurled with technology. However, as these discoveries are put to use, retooling, upskilling or reskilling are required from employees who desire to be in lane and up-to-date. 

    The OECD confirms that “the empirical evidence based on AI adopted in the last 10 years does not support the idea of an overall decline in employment and wages in occupations exposed to AI. Some studies suggest a positive impact of AI on wage growth.”

    Workers’ welfare and insurance

    There are lots of legislations aimed at the protection of workers’ rights and exploitation. In addition, we have pensions, group life and health insurance, workmen’s compensation and social security. Insurance of buildings under construction and other public liability insurances should be subjects of interest to organized labour. My previous articles on this tended to draw attention to the fact that the lack of awareness in the provision of these basic protections for workers has helped unscrupulous employers to divert benefits meant for the employee to other uses. 

    Firm-based incentives like profit sharing and staff shareholding opportunities have also been used effectively to motivate workers to perceive the work and their productivity as self-enhancing. Fortunately, workers know when output and sales are high and can push for more pay. And when it declines, what about a pay cut? These are frictions that may arise from the dynamics or the work environment.

    Aside the organized labour, smaller pressure groups have negligible muscles to push for any adoption of mass insurance. It is in their interest because what is regarded as workers are diverse and multiform but having the labour unions as the most powerful mouthpiece and instrument for fair labour practices.

    Group life insurance and pensions are mandatory for all employers of labour, from MSMEs to large corporations. Enforcement of compliance on the pension side is smoother, though companies’ group life insurance was farmed out of the Pensions Reforms Act. Organised labour in the country may seek the services of consultants to look at the provisions and advice and extension that can be mutually beneficial to both employer, employee and regulators. One such area to examine is what may accrue, in terms of financial benefit, to the worker in the event he leaves office from five years and above. This may require that the existing offering has a contribution from the employee and the group life takes the form of savings with death benefits. Both NAICOM and PENCOM have much input in this after the provision has been reworked.

    Typically, HMOs provide health insurance for established companies. Since a healthy workforce is key to higher productivity, Labour unions should also ask questions about their health insurance and their coverage, benefits both to themselves and their families. What is adequate for the type of work and the exposure to work hazards? These are payments that are not monetized but which in any case accrue to the worker. Workplace unions and the enterprises’ HR units should educate their members about health insurance to give them a fair idea of the benefits so that in health emergencies their families are well taken care of within the values placed on their contribution to the company. The unions can trigger negotiations where they believe their members are not covered. 

    The social security Act now operating as the Employee Compensation Scheme under the Nigeria Social Insurance Trust Fund offers compensation to insured employees for occupational ailments, injuries or disability at work and the duration of employment. Working in tandem with buildings under construction insurance can be strengthened through the labour movement’s demands for total compliance by companies. The collective agreements ought to include this special provision, mostly for skilled labour in order to stop non-compliance in this respect. 

    AI knowledge acquisition

    According to the OECD, “the occupations judged to be most exposed to AI include high-skilled occupations involving non-routine cognitive tasks, such as lab technicians, engineers and actuaries. Actuarial input is essential in every sector and all types of work. Nigeria does not have many qualified actuaries and thus, should draw from AI to do much-needed actuarial valuation of its financial and non-financial activities. However, it is not foreseen that jobs in these occupations will disappear with their high exposure to AI. 

    While the labour market must not be fixated on physical routines and building bottlenecks to AI’s expanding capabilities, the movement should seek a greater impact on the basis of “reorganisation of tasks within an occupation, with some workers ultimately complemented in their work by AI, rather than substituted by it”.  

    Essentially, workers may demand reskilling and upskilling from their employees to adapt to the emergent reorganisation of tasks and AI-related new tasks and prevent potential job loss as well as navigating transitions to new jobs. “The smoothness of the AI transition and the extent of the impact on workers will also depend on firm-level incentives to retain and retrain staff and on institutional factors, such as the general infrastructure for training and job-search available in the country, direct government funding, tax incentives and social benefit systems.”

    In the paper, “The Impact of Artificial Intelligence on the Labour Market: What Do We Know So Far?” the Organisation for Economic Cooperation and Development identified AI gap areas where human labour require strengthening to include “creative and social intelligence, reasoning skills, and dealing with uncertainty”

    The OECD’s Artificial Intelligence in Work, Innovation, Productivity and Skills (AI-WIPS) programme endeavours to build AI principles that are “innovative and trustworthy and respect human rights and democratic values”. The principles outline actionable areas for governments to build human capacity and prepare for labour market transformation including;

    ▪  “Empowering people to effectively use and interact with AI systems, including equipping them with the necessary skills;  

    ▪  Ensuring a fair transition for workers as AI is deployed, including via social dialogue, training programmes, support for those affected by displacement, and access to new opportunities in the labour market; and 

    ▪  Promoting the responsible use of AI at work, to enhance the safety of workers and the quality of jobs, to foster entrepreneurship and productivity, and to ensure that the benefits from AI are broadly and fairly shared.”

    The Nigerian tech environment and AI

    Although Nigeria appears to have started early to institutionalise the framework for a knowledge-based economy through the National Centre for AI and Robotics (NCAIR) and the Nigeria Data Protection Regulation (NDPR) much requires to be done to own these systems. In order words, we regulate what we do not indigenize. The best way to start is to harness the tech-savvy youth population and tap the Indian market for technology transfer.  

    Nigeria is said to be one of the most technologically advanced countries in Africa but it is estimated that over 90 per cent of software used in the country is imported. Ordinarily, these should be labour growth areas where higher employment is possible. The wholesale adoption of AI without demanding transfer will not bode well for the Nigerian economy and the labour market.  

    Organized labour also needs to address its demands for changing work environment and the wages thereof. A scalable remuneration is based not only on productivity performance scales but also on extreme work requirements. For instance, those who work night shifts must demand higher pay during the time they are deprived of their sleep. Day’s hourly or weekly salaries should not be the same as Night’s. Work supervision at night even when AI is deployed is tasking.

    Finally, it is important that a study group comprising all stakeholders is set up to foretell and predict the impact of AI adoption, and adaptation on the Nigerian systems – the human interface and jobs that could spin off from these. The OECD papers would be a good reference for the study group.

  • TNG Deal Breakers: What is in an Earth Day?

    TNG Deal Breakers: What is in an Earth Day?

    The Earth is that planet where we live and work as inhabitants. So, we could actually say that humans are guests of the Earth because it provides them accommodation to develop themselves and add value to the existing structures they met in a lawful, aligning and developing manner. But have we achieved this task?

    Man on earth today may be likened to the farmer who defecates along the path leading to his farm (his workplace) and often negligently forgets that he will have to walk that path again and again to reach his farm and the inevitable consequence is that on returning to his farm, he steps on his faeces and fouls himself thereby. Far worse than this illustration, humankind is increasingly becoming homeless, neither here nor there, thus also his continued existence on earth is being threatened– by himself through his increased misalignment with nature. 

    Indeed, we need a shift to a more sustainable economy that works for both people and the planet’s creatures, yet it is not only the trees, plants, animals, rocks, and so on that we physically, see around us that matters but also the gregarious species of nature.  Thus, the plea by the UN to all of us ‘to promote harmony with nature and the Earth should be all-encompassing. If only humankind can leave nature to restore itself and focus on its primary task of developing itself, then the right balance will be achieved.

    Earth Day and Humankind’s crime against nature

    So, the United Nations, sounding somewhat conciliatory on this year’s Earth Day says urgent action is required to support our co-existence with nature. The global community is pained that nature’s consistent warnings and messages to humankind are unheeded.  On April 22 this year’s Earth Day was marked. Yesterday, Monday, April 24, followed a UN Interactive Dialogue to celebrate the Day.

    “Mother Earth is clearly urging a call to action. Nature is suffering. Oceans filling with plastic and turning more acidic. Extreme heat, wildfires and floods, have affected millions of people. Even these days, we are still trying to get back on track from COVID-19, a worldwide health pandemic linked to the health of our ecosystem,” UNCTAD lamented 

    Admitting to specific wrongdoings to our host community, the UN says, “Climate change, man-made changes to nature as well as crimes that disrupt biodiversity, such as deforestation, land-use change, intensified agriculture and livestock production or the growing illegal wildlife trade, can accelerate the speed of destruction of the planet.” 

    Notwithstanding the admission of guilt, the global community is doing absolutely significant to curtail its foray into nature and the ambitious quest of humankind to ‘conquer it” and subjugate it to ways known to foster this mad ambition. Instead of conquering, science could say work with nature to foster the development of that species and the human species.

    Note here that the UN did not decry the intense energy release in military nuclear missile tests and its consequences on biodiversity and how the wrong accumulation of these energies and their carbon components destroy the ecosystem. Instead, it concentrated on the lesser activities common in less developed countries.

    Contrary to the UN statement that “nature is suffering”, it is actually humanity that is bearing the brunt of its wrong activities in the accommodation that nature afforded it. Really, nature is not suffering if science did understand the species we call nature.

    Mother Earth Day was celebrated for the second time on Saturday, 22 April 2023 “within the UN Decade on Ecosystem Restoration”. The UN believes that ecosystems should support all life on Earth. “The healthier our ecosystems are, the healthier the planet – and its people. Restoring our damaged ecosystems will help to end poverty, combat climate change and prevent mass extinction. But we will only succeed if everyone plays a part”. Yet again, it should be stressed that the humans inhabiting the earth and the nature therein should endeavour to understand its role to their host.

    The Business of a Green Economy

    Beyond contrite entreaties to all of earth’s inhabitants to work together towards averting the collapse of the ecosystem, it is business, economy and opportunities for prosperity that rule man’s engagement. Apparently, this thinking would not be wrong in itself but leads to the same destruction of the means of sustenance and sustainability of the earth’s ecosystems. Any disequilibrium, imbalance, inequity and injustice results in destruction. For, green technological development should not be about us only but about all creatures. 

    Out of 166 countries ranked in 2023 according to their adoption and adaptation of frontier green technologies, Nigeria is placed 119, an improvement of 5 places it occupied in 2022. At number 56, South Africa is the highest-ranked African country. Countries were ranked according to their ICT, Skills, R&D, Industry and Finance readiness. Green technologies refer to goods and services produced with little amounts of carbon footprints. These are new massive growth areas which increasingly provide economic opportunities, though the default is that developed economies are far ahead while developing countries could miss out significantly “unless national governments and the international community take decisive action.”

    UNCTAD’s Technology and Innovation Report 2023 published about a month ago “warns that economic inequalities risk growing as developed countries reap most of the benefits of green technologies such as artificial intelligence, the Internet of Things and electric vehicles. This also includes solar and wind energy and green hydrogen.

    Secretary-General of UNCTAD, Rebeca Grynspan notes with concern for developing countries; “We are at the beginning of a technological revolution based on green technologies” with its portentous impact on the global economy. 

    “Developing countries must capture more of the value being created in this technological revolution to grow their economies.” Grynspan added warning; “Missing this technological wave because of insufficient policy attention or lack of targeted investment in building capacities would have long-lasting negative implications.”

    Market Size 

    While declaring in its report that developing countries are the least ready in the adoption of green technologies to grow their economies, “UNCTAD estimates that the 17 frontier technologies covered in the report could create a market of over $9.5 trillion by 2030 –about three times the current size of the Indian economy”. The report revealed that currently, developed economies are making the most of the emerging opportunities with leftovers for developing nations.

    According to the report, the total exports of green technologies from developed countries jumped from around $60 billion in 2018 to over $156 billion in 2021. In the same period, exports from developing nations rose from $57 billion to only about $75 billion. In three years, developing countries’ share of global exports fell from over 48% to under 33%.”

    UNCTAD’s analysis shows that developing countries must act quickly to benefit from this opportunity and move to a development trajectory leading to more diversified, productive and competitive economies. Previous technological revolutions have shown that early adopters can move ahead quickly and create lasting advantages.

    International Cooperation

    Much as the world body acknowledges the urgency necessary for developing countries to close the opportunity gap, it admitted that taking such advantages spawned by green technologies would not be easy unless domestic policies and global cooperation align with the Paris Agreement to harness the green economy.

    UNCTAD proposed protectionist policies in international trade rules that should “permit developing countries to protect emerging green industries through tariffs, subsidies and public procurement – so that they not only meet local demand but also reach the economies of scale that make exports more competitive”. In addition, green technology transfer to developing countries is also critical to creating some trade balance in the emerging green economy.

    The UN report wants to invoke the same principles applied to the COVID-19 pandemic, “when some countries were allowed to produce and supply vaccines without the consent of the patent holder” to enable manufacturers in developing countries quicker access to key green technologies.

    It says international trade and related intellectual property rules should provide more flexibility for developing countries to develop industrial and innovation policies to nurture their nascent industries so that new green technology sectors can emerge there.

    It is estimated that humanity (not the Earth) is losing 4.7 million hectares of forests every year to disruptive activities. Science finds that a healthy ecosystem helps to protect us from these diseases. While “biological diversity” makes it difficult for pathogens to spread rapidly. “It is estimated that around one million animal and plant species are now threatened with extinction”.

    The real challenge facing us in the relationship with our planet is the scientific understanding of a holistic development that takes into consideration the fact that billions of years before mankind started living on earth, nature and its myriads of species had evolved and perfected their existence in what we now refer to as our ecosystem. Without nature, mankind would be unable to live on Earth. It would be uninhabitable! Therefore, harmony with nature is essential. However, this nature comprises not just what science can substantiate today but much more.

    This year’s Earth Day should have afforded the UN and the global science community the opportunity to probe deeper into the comprehensiveness of nature and discover why mankind is the only species that disrupt the existing balance.

  • TNG Deal Breakers: NSCC and the reimaging of senior citizens’ care

    TNG Deal Breakers: NSCC and the reimaging of senior citizens’ care

    The National Senior Citizens Center seem to have hit the ground running since it was constituted about two years ago. It was constituted in 2021 after the 2017 Act came into force that gave it powers to among others standardize, and regulate caregiving in Nigeria. Hitherto, elderly person’s homes, whether run by missionaries or private organisations derive their operational codes from practices introduced by caregivers who have practised overseas.

    The NSCC Act is perhaps, the first attempt by any government in Nigeria to reimage the life of senior citizens. The various partnerships that Dr Emem Omokaro’s-led leadership are harnessing show a clear direction of what is achievable when an organization is focused on its mandate. Particularly delightful is the recent agreement in principle to get the National Board of Technical Education to devise a curriculum for the upskilling of people who are already in the caregiving space and those who want to find a career path in that direction. Establishing a “national benchmark” for setting minimum standards and curriculum for certifying caregivers is as important as understanding the needs of the elderly.

    Interestingly, the Centre has acknowledged the special needs of the elderly particularly in rural communities and primed itself to work towards better care for them. For this, a partnership with the Federal Ministry of Health has also been initiated. The form it would take has not yet been disclosed by the senior citizens centre. As additional agenda, health insurance professionals should be part of the team working out a framework for better medical care of older persons. 

    Upscaling investments into the facilities already existing for caregiving should be a direct priority of the federal government and state governments through the NSCC. In order to obtain a spot assessment of what is ground, the NSCC should undertake a tour of top caregivers in the country on a zonal basis and evaluate possible public-private partnerships that are result-driven and aimed at edifying these facilities. Aside from investment into physical facilities, mass enrolment in basic healthcare insurance and special needs insurance of the seniors are crucial to elevating these homes.

    In order to have an understanding of the imperative for the establishment of senior citizens centres as well the motivation driving individuals or groups to set up a caregiving home for seniors, one only needs to imagine some stories one had heard, read or watched a couple of times when old people slump and die while queueing to receive their pensions. Again, it is possible to recall the after-work or retirement life of an uncle, dad and any such relatives – boredom, unusual routines and gradual loss of hold on life or the withdrawal syndrome almost akin to the old person’s loss of confidence towards contributing meaningfully to society. 

    Then follows diseases associated with this phase of life. Whereas individuals should take responsibility for their failing health before old age, lots of circumstances beyond the capacity of some persons may hinder them from being able to take care of themselves. However, beyond family or community care for the elderly, a sustainable healthcare system built around insurance is the preferred and affordable means to a healthier population.   

    Retirement as a new phase of life

    Society, the community and indeed humankind, all of us are responsible for the prevailing conditions of the aged people in our midst because we formed and fostered a wrong, albeit debilitating concept of retirement. In my earlier article, I pointed out that the development of the individual is unstoppable. However, transitions occur in between which simply means that the forms of development change as we grow older. In real terms, retirement is not retirement unless a terminal illness dictates otherwise. The education that should be woven into the consciousness of schooling is that continuous development, as the name implies, has no limit to age. It is a law that we must continually live or get scrapped if we choose to not live. 

    Therefore, the NSCC has a huge responsibility of not only developing a career path for caregivers but also upskilling the seniors to contribute actively to their communities. The specific modalities may be developed in accordance with groupings based on their experiences in addition to what impassions them. The fraternal inclinations of the elderly must also be taken into consideration while putting them in various groups. The majority of seniors are motivated to give back to society and if this energy is channelled deliberately to where it is needed, both the giver and the received are greatly enhanced. 

    The insurance needs of the elderly

    Although insurance should aid us through life and not something that should emerge at the tail end of the earthly cycle, still it is important to highlight the special needs medical and healthcare insurance. Sometimes the two terms, medical and healthcare insurance may be interchanged, it is better to use the terms to describe what it offers. Medical insurance often refers to covers relating to pre-existing conditions or existing medical conditions while healthcare insurance may be used to describe basic healthcare for common illnesses.

    Most children pray for a healthy long life for their parents. The best way this prayer can work well is to purchase healthcare insurance for their access to routine and required medical attention. This requires that at the time families start buying health insurance packages, parents should be part of it. Out-of-pocket expenses never suffice to maintain the healthcare needs of a family and their aged parents. Starting early ensures that you don’t have to deal with burgeoning health insurance costs later.

    Domiciliary Care, Higher care, psychiatric care and other pre-existing conditions insurance are important considerations for the purchase of insurance for seniors. Due to the mobility challenges of most seniors, domiciliary care insurance covers the cost of home medical treatment. Depression and dementia are also common at this stage of life and to ensure adequate treatment psychiatric cover is essential. Overall, it is better to opt for higher coverage of healthcare insurance for older people so that basic hospitalization and post-hospitalization would be covered. Add-ons may include dialysis and other special needs.

    Since the country now has an organization dedicated to raising the standard of care for older people, the starting point for NSCC should be enumeration. The planned census, if well conducted will give the Centre the population to work out their operations and extend the much-needed hand to rural communities where the majority of the older people live. Many do not have access to any form of medical treatment for their ailments, and most live in poor conditions without adequate hygiene, thus exposed to a greater danger of infections.

    In conclusion, care for the elderly should be defined in an all-embracing way to delineate preparatory years to 70 and the actions to be taken by families, groups or the government. The existing National Social Register of Poor and Vulnerable Households should be filtered to get more authentic figures. The Federal Ministry of Humanitarian Affairs, Disaster Management and Social Development, the supervising ministry for NSCC claims to have more than 200,000 elderly persons in its register. This is the time to approach health insurance companies to put together programmes that will benefit our seniors.

     It is also important that the National Policy on Ageing which establishes and institutionalizes the framework in NSCC for the social and economic integration of the elderly are popularized among the population.