The Nigeria Employers’ Consultative Association (NECA) has issued a stern warning to the Federal Government of Nigeria regarding the prolonged absence of governing boards for the Nigeria Social Insurance Trust Fund (NSITF) and the National Pension Commission (PenCom). NECA’s Director-General, Mr. Adewale-Smatt Oyerinde, expressed deep concerns over the lack of accountability and transparency in the management of employer contributions and workers’ pension funds, emphasizing that the continued absence of these boards poses significant risks to the financial security of Nigerian workers and retirees. NECA has threatened to suspend employer contributions to both institutions if the government fails to address this critical governance gap urgently. This drastic measure underscores the gravity of the situation and the growing frustration among employers who demand proper oversight and management of the funds they contribute for the welfare of their employees.
The core issue lies in the prolonged delay in constituting the governing boards for NSITF and PenCom, which are mandated by law to oversee the operations and ensure the judicious management of funds. The NSITF Act of 1993 explicitly stipulates the establishment of a board to manage social insurance contributions, while the Pension Reform Act (PRA) 2014 mandates the PenCom Board to safeguard the integrity of the pension industry. The absence of these boards creates a vacuum in governance and oversight, leaving the substantial funds contributed by employers vulnerable to mismanagement and potential misuse. NECA argues that this lack of transparency and accountability contradicts international best practices and undermines the trust of both employers and workers in these vital institutions.
NECA vehemently emphasizes that the contributions made to NSITF and PenCom are not government revenue but funds specifically earmarked for social security and pension benefits for workers. These funds are entrusted to these institutions with the expectation of responsible management and disbursement to beneficiaries. Without the established governing boards to provide oversight and accountability, the management of these funds becomes opaque and susceptible to potential misuse. This concern is further amplified by the growing apprehension regarding financial mismanagement within government institutions in Nigeria. Stakeholders fear that the prolonged leadership vacuum in NSITF and PenCom could exacerbate existing inefficiencies and create opportunities for the misappropriation of funds meant for workers’ welfare.
The absence of these boards also represents a significant departure from global standards for managing social security and pension funds. International organizations like the International Labour Organisation (ILO) advocate for robust governance structures and transparent management of such funds to ensure the financial security of workers and retirees. Nigeria’s failure to adhere to these standards not only undermines the trust of its citizens but also raises concerns about the long-term sustainability of the social security and pension system. The potential consequences of this inaction are far-reaching and could destabilize the financial well-being of countless Nigerian workers and retirees who rely on these funds for their livelihood.
NECA’s threat to suspend contributions is not a mere bargaining tactic but a desperate measure to protect the interests of their members and the wider workforce. The association recognizes its statutory obligations and remains committed to contributing to the social security and pension system. However, they insist that the government must reciprocate this commitment by upholding the principles of good governance and ensuring the responsible management of these vital funds. The continued lack of action by the government puts employers in a precarious position, forcing them to consider drastic measures to safeguard the funds they contribute. This impasse underscores the urgency of the situation and the need for swift government intervention.
This call for urgent action by NECA adds to the mounting pressure on the Federal Government to address the pervasive governance lapses across critical agencies. The association has urged President Bola Tinubu’s administration to prioritize the reconstitution of the NSITF and PenCom boards without further delay. This action is crucial to restore transparency and accountability in the management of these funds and to protect the hard-earned contributions of Nigerian workers. By swiftly addressing this critical governance gap, the government can demonstrate its commitment to the welfare of its citizens and restore confidence in the social security and pension system. The future financial security of millions of Nigerian workers and retirees hangs in the balance, making decisive action by the government paramount.
