Speeches
The Keynote Speaker
Mr. Sunday Thomas
Commissioner for Insurance
National Insurance Commission [NAICOM]
The Guest Speaker,
Engr Simbi KesiyeWabote
Executive Secretary/CEO
Nigerian Content Development Monitoring Board
[NCDMB]
Distinguished Panelists
Industry Players in Insurance and Oil and Gas
Distinguished Ladies and Gentlemen.
It is my pleasure and honour to be invited as Chairman of this very important Summit organized by Oriental News with the theme Building Local Content Synergy between the Oil and Gas and Insurance Sectors in Nigeria.
Let me commend the organizers, Oriental News, for this initiative. I also would like to join them to appreciate the sponsors and partners for this summit. In particular I would like to commend the Nigeria Insurance Commission [NAICOM] and the Nigerian Content Development Monitoring Board [NCDMB]for supporting this summit.
The insurance is a N647 billion industry going by its contribution to the country’s Gross Domestic Product [GDP] in 2022. This is a mere 0.32% of our GDP.In a N202 trillion economy, this is not a significant contribution. This underscores the fact that the sector has enormous prospects for growth amid the huge potentials that exist in Nigeria. The sector contributes to the growth of the economy through the provision risk indemnification and transfers. The industry players also deliver value as institutional investors in the economy.
The oil and gas sector is the life wire of the Nigerian economy. The value of the sector is N12 trillion, based on its contribution to GDP in 2022.Although the sector contributes just about 7% to GDP, it provides about 90% of the foreign exchange earnings in the economy. This foreign exchangeearningsare critical for our foreign reserves, exchange rate stability and balance of payment position.
The theme of this summit is quite apt. The good news is that the Nigeria Oil and Gas Industry Content Development Act already provides a robust legal and regulatory framework for synergy between Insurance Industry and the Oil and Gas sector in Nigeria. The heavy lifting has been done by this legislation, as it were. We could not have had a better legislation to create opportunities for the Nigerian insurance sector than this Act. Permit to quote just a small part of the relevant provisions of the Act.
Section 49 [1] states among other things that
“All operators, project promoters, alliance partners and Nigerian indigenous companies engaged in any form of business, operations or contract in the Nigerian oil and gas industry, shall insure all insurable risks related to its oil and gas business, operations or contracts with an insurance company, through an insurance broker registered in Nigeria under the provisions of Insurance Act as amended.’
Section 50 states,among other things, that
“No insurance risk in the Nigerian oil and gas industry shall be placed offshore without the written approval of the National Insurance Commission which shall ensure that Nigerian local capacity has been fully exhausted.”
There are other comprehensive complementary provisions in the act which outlines clear monitoring and evaluation framework to ensure compliance with the provisions of thisAct.
The oil and gas industry in Nigeria is a multi-billion dollars industry. With ongoing reforms, the prospects for the growth of the industry have heightened considerably. This offers corresponding growth in opportunities for insurable risks.
And only recently at the Nigerian Oil and Gas Opportunity Fair (NOGOF) in Yenagoa, Bayelsa State, new investment prospects valued at over $50bn were showcased by international and indigenous companies. These prospects are projected to be developed within five years. These are phenomenal opportunities for the insurance industry.
Additionally, the Petroleum industry Act has unlocked tremendous investment potentials in all aspects of the oil and gas sector – upstream, downstream and service sectors. The act has created much better regulatory and institutional environment for investment growth across the broad spectrum of the sector.
The federal government and the National Assembly have played their roles in laying the foundation for the desired synergy; it remains for the industry players, working with the regulators in both sectors, to take advantage of the prospects.
Distinguished Ladies and gentlemen, it clear from the foregoing that the opportunities for synergy between insurance and oil and gas sector are immense. But we need a solid framework for collaboration and partnership between the insurance community, the oil sector investors, the NAICOM and the NCMDB to be put in place to harness the enormous potentials
In conclusion, let me advise insurance industry players to strengthen their public policy advocacy to boost the demand side of insurance. This should focus on the following:
- Ensuring compliance with current provisions with respect tomandatory insurance. Current level of compliance is extremely weak.
- Promote and deepen insurance premium subsidy in critical areas of the economy such as agriculture, health and climate change projects.
- Deepening financial literacy to create awareness for insurance products.
- Tax incentives on insurance premiums.
On the supply side, industry practitioners need to strengthen domestic capacity in the following areas:
- Capital adequacy
- Claims management
- Trust level and perception issues.
- Use of technology
- Professionalism in the conduct of intermediaries.
- High corporate governance principles.
- Innovative marketing and customer focus.
Finally, I welcome you all to this summit and hope that the outcomes of our deliberations will be useful for the growth of the insurance industry, the oil and gas sector and the progress of the Nigerian economy.
I thank you for your attention.
Being full speech of Muda Yusuf, Director/CEO, Centre for the Promotion of Private Enterprise [CPPE] at the Oriental News 2023 summit held at sheraton hotel, ikeja, on 20th july 2023
A.
– July 20, 2023 @ 17:22 GMT |
Tags: Mr. Sunday Thomas
