With effect from next year, there will be no more allocation for the National Insurance Commission in the federal budget
| By Vincent Nzemeke | Sep. 23, 2013 @ 01:00 GMT
THE National Insurance Commission, NAICOM, will stop receiving budgetary allocation from next year. Yerima Ngama, minister of state for finance, disclosed this in Abuja, on Tuesday, September 10, while inaugurating new members of a new governing board of the commission.
Ngama said the decision to omit the commission from the budgetary list was because NAICOM is now in a position to generate funds for itself. “The federal government supports the commission as its internally-generated revenue grows. But today, the industry has grown and it is healthy. We believe that as from next year, NAICOM, just like the Central Bank of Nigeria and National Deposit Insurance Commission, NDIC, should be able to generate enough internal revenue to embark on their activities without any budgetary support from the federation account.’’
Ngama, also noted that a strong insurance sector is key to achieving the nation’s vision to be among the top 20 economies of the world by 2020. “We have to reposition the insurance sector in order to provide the services needed by one of the 20 largest economies in the world. Right now, insurance penetration is very low and we need to make insurance products very attractive because this is a source of capital which we have not tapped.
Ngozi Okonjo-Iweala, minister of finance, who also spoke at the inauguration ceremony, emphasised the importance of the insurance industry to economic development. She also charged the new board to work hard to add value to the economy. “We expect insurance companies to be strong enough to handle the expanding businesses in the economy. We, therefore, expect the new NAICOM board to produce results that will be financially rewarding and add value to the economy.”
Fola Daniel, commissioner, NAICOM, said the commission was satisfied with government’s decision to stop funding it because it was strong enough to be self-sustained and contribute to the national treasury.
Speaking on behalf of the new board, Chibudum Nwuche, the chairman, said the incoming board would study the industry carefully to ensure growth in the sector. Other members of the newly constituted board are Kola Ahmed, representing the Chartered Insurance Institute of Nigeria; Kali Zagi, representing the ministry of finance and Bashir Zubairu from the House of Representatives.