FG not insuring assets despite budget allocations – Oguntade

The President/Chairman, Governing Board, Nigerian Council of Registered Insurance Brokers, Bàbàtunde Oguntade, has expressed concerns that the Federal Government is not insuring its assets despite allocations made for insurance premiums.

Speaking during a press conference held at the Council’s headquarters in Lagos, Oguntade noted that the Lagos-Calabar Highway  and other development projects do not have insurance components and thus are not insured.

He said, “We visited the Minister of Finance and Coordinating Minister of Economy, Mr. Wale Edun, and Minister of Budget and Economic Planning, Senator Abubakar Bagudu, to engage them in areas we would like to collaborate with them. We went there because we found out that over the years, insurance is embedded in the budget, but the premiums are not paid. The funds are diverted into contracts, and then even the contracts are not insured.

“For instance, the Lagos-Calabar Highway does not have an insurance component. We are still trying to see the Minister of Works, David Umahi, and we are hoping it will turn out well eventually. We have also engaged with other key stakeholders among the government officials, industry leaders, and other relevant parties to foster relationships, promote our members’ interests, and advocate the growth of the insurance sector.

These visits have enabled us to build bridges, address challenges, and explore opportunities for collaboration.”

He, however, lauded the government’s commitment to investing in critical sectors such as transportation, energy, and housing, saying, “Initiatives like the National Integrated Infrastructure Master Plan and the Economic Recovery and Growth Plan demonstrate the government’s dedication to bridging the infrastructure gap in Nigeria. The huge expenditure of the government on building several highways and railways in this year’s budget is well noted.

“However, I firmly 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. Insurance is a critical component of any infrastructural development/project, as it provides financial protection against unforeseen risks and losses.”

On the planned enforcement of third-party motor insurance by the police, Oguntade said it would benefit the insurance sector.

“The IGP is for the federation, and when he gives an instruction, it goes to the commissioners. They have an investment in the area and others like mortgages and microfinance banks. I’m sure this NPF will not fail because they will ensure that they drive the market, and you know NPF cannot eat everything. The principle of insurance is in the sharing, so this industry will benefit from whatever initiatives the IGP is thinking of. The third-party insurance is a national thing, and it’s even cross-border now because it has the ECOWAS element there. If people really knew the benefit of what N15,000 is doing for them, nobody would need to chase them. I’m sure we are going to have improvements in that area,” said.

Earlier in the month, the police announced February 1 as the commencement date for the enforcement of third-party motor insurance nationwide.