NSITF: The Journey So Far, By Anayo Ude
The Nigeria Social Insurance Trust Fund (NSITF) was established by Act No. 73 of 1993 to succeed the defunct National Provident Fund with mandate to provide a Social Insurance Scheme for employees in the Organized Private Sector. Prior to the enactment of the Pension Reform Act of 2004, it can be said that the Fund executed this mandate to the satisfaction of all.
However, with the coming of the Pension Reform Act, also called PRA 2004, though desirable in all of its ramifications, mark a turning point in the existence of the NSITF was on the flip side a big challenge for NSITF. Before the Act, NSITF had operated as a very successful government Agency from 1994 to2004. And just as it was about to stabilize as a Pensions provider came PRA 2004 and everything halted for NSITF. In fact, the Fund was almost disbanded.
Umar Munir Abubakar is the Managing Director/Chief Executive of the Fund. He was the Director of Administration at NSITF when PRA 2004 was enacted. He says the Act presented a unique challenge to the continued existence of the Fund.
“If you look at the portion of the reform act that said we should be disbanded and transfer all our assets and liabilities to PFAs. Section 71 of the PRA said we should provide social security to the entire country – and that was what the PRA said and no more. Nothing was said on how we should go about it.
But under the Act, NSITF was required to transfer all the assets to a Pension Fund Administrator. And so the challenge was with what to do and how. Hear Abubakar.
“When the Act came into effect, we were forced to transfer the assets within months after the coming of the Act – and it came when were not ready for that. That was the first measure we had to grapple with. At that time, we had a staff strength of well over 2000 people and not only that, we had structures all over the country, and our assumption was that we were going to transfer these assets within 5years. And that we were supposed to take our time to transfer the assets year by year until we finish within 5years. But we were forced to transfer these things within few months after the take-off of the pension reform. Obviously we had to face very big challenges”
And the first was with how to continue to exist as an Agency of government. With PRA 2004, the Fund had nothing in the practical sense to do anymore. According to Abubakar, the situation was very dire.
“The new scheme we were looking forward to did not come up, the social security scheme mention in the Act did not come up and we were not given any means of earning revenue. Immediate the pension reform act came in, I remember PENCOM, the first statement it issued was in December 2004 asking all employers to stop contributing to NSITF Scheme. Immediately this was done, we were left with virtually nothing to run the scheme on. Six months thereafter, we now saw the problems coming in”
He said one of the options open to the Management was to restructure.
“We had to virtually down-sized from well over 2000 to 90 – 94 people. Don’t forget that we had offices all over the federation; these offices had to be virtually closed down. In most offices we had just 2 people each – and skeletal services, and this lasted for the next 7 to 8 years. So you can see what we went through. And within those 7 -8years, we did not earn a single kobo from anywhere”
That notwithstanding, Abubakar says the Fund had to find other ways to continue to exist and function because “We had to keep servicing the PFAs because they were already on ground, you know. We had to continue dealing with them – in terms of the beneficiaries and claimants.
He admits the situation even got worse with time “the issue became a very big problem for us. Even to pay salaries became a very big challenge for us. So, within the 7 to 8 years I mentioned, obviously, structures started coming down, and in all cases our offices were very old and some of them were being rented. So we could not even pay rent in most cases. Before you know it, all our offices became closed down; all the structure were down, equipment were down, ACs and generators were all down because we could not maintain anything. It was a very big problem for us, it was a very big problem”
The Managing Director/ Chief Executive remembers the sad and very challenging issue of what to do with the Fund’s strategic office in Ijora Lagos. The building is located by the Lagoon and was being threatened by the forces of nature.
“The Lagoon had almost swallowed half of that Office; we hadn’t any money to maintain it. That office had to be closed down for safety reasons because the Lagoon has taken over, water is percolating from underground, there is no parking space, everywhere was particularly taken over by water, there had been a lot of development and sand filling in other parts of Apapa, the sand filling and development forced the lagoon to come towards Ijora side and since we didn’t have any money to stop it, it came eroding our building.
“So, we did not have anywhere to stay in Lagos, we didn’t have offices that we could call real offices in Lagos because we didn’t have money to rent bigger offices. Unfortunately for us at that time also, our Victoria Island office lease was about finishing and we didn’t have anywhere to go” he added
It was therefore a big relief for the Fund when government approved and created the Employee Compensation Scheme, ECS, in 2011, to give bite to the Social Insurance portfolio of the PRA 2004. For seven years the Fund had floated without a scheme to operationalize the portfolio. Abubakar says President Goodluck Ebele Jonathan must be praised for exercising the courage and foresight in creating the Employees Compensation Scheme
“When the ECS came on stream, it was a very big relief for this organization … the government was able to sign the Act … by December 27th it was signed into law by 2011 we took off. And this is where we are today”
But operationalizing the new scheme and getting it off the ground presented a different kind of challenge. Remember that by this time, the Fund was almost comatose. Offices across the country had all been closed, Staff strength and morale was at ground zero. So, Abubakar says Management was faced with the twin challenge of producing a roadmap for the scheme, being a new one in the country and sourcing for funds to provide the human and infrastructure needs of the weather beaten NSITF.
Hope however came with the appointment and inauguration of a Board of Directors for the Fund by President Goodluck Ebele Jonathan. Led by divine providence and quest for the best for the Fund, President Jonathan appointed an amazon and a leader with a magic wand, in the person of, Dr (Mrs) Ngozi Olejeme to lead the Board as Chairman. And since then, the Fund has leaped from one achievement to the other.
Chief R.U Uche is the President of Nigerian Employers Consultative Association, NECA, and a member of the Board of the Fund “As you know a healthy work force is number one item for increasing productivity, as it is now, we have been very much the witness to the idea that the Fund has grown in numbers from year to year. From a Very modest beginning in 2011 we are talking about, maybe, tenfold increase since then. We are happy for that”
He says the Chairman of the Board Dr (Mrs) Olejeme has been an exceptional leader so far. “She is a woman that has passion for social security and the welfare of employees and it has shown both by the way she conducts the Board meetings and the way we have been able to implement this Act to the benefit of employees, she is truly a leader”
Also speaking on the person on the Chairman of the Board, Dr Olusegun Oshinowo, Director General of NECA, a major stakeholder in the affairs and operations of the NSITF says the appointment of Dr Olejeme has been critical to the successes recorded by the Fund so far.
“She has provided commendable leadership, she is a team player, I must say, and she has enormous respect of the social partners and to that extent we would want to say that the scheme has done very well”
Dr Emeka Wogu was the Minister of Labour and Productivity, the supervising ministry of the NSITF. He agrees and describes Dr Olejeme as a distinguished lady, an achiever and a wonder worker.
“I have not heard any incidences of conflicts or conflicts between the Board and management, not to my knowledge, so that means that underscores the administrative sagacity of the distinguish lady, the Chairman Dr Olejeme and we have not had any reason to say she has not done her job as a Board Chairman diligently, she is a nice woman, she is a woman who was consistent on the need to have a new NSITF with a new face”
One person who can attest to what NSITF gained under Olejeme is the Managing Director of the Fund. He says the task of repositioning NSITF within the short period it has happened would not have been possible without the leadership of Dr Olejeme as Chairman of the Board. Under her leadership he says the Fund has witnessed what he describes as a living Board
“We are lucky we have an indefatigable woman that is, in fact, let me tell you, when the scheme came on stream, she worked very hard, tirelessly to make sure that it takes off immediately. All the problems I mentioned like funding and so on, it was handled. She had to go up and down to make sure we are funded. We are glad she did that. And of course she had the support of the Board members.
He says Dr Olejeme has provided an all-round leadership as Chairman of the Board. “All the things we need, going to the national assembly and so on, she leads us. Whatever we need we have to talk to her, she is ready at any time to lead us to the national assembly, to the government, to the minister, so we thank the Board, the Board has a very good working relationship us, we respect the Board, we thank them, in fact, if not for the Board encouragement, we wouldn’t have gone far”
Beyond the Executive Arm of government, Olejeme has also received encomiums from members of the National Assembly. Chairman House Committee on Labour, Honourable Essien Ekpeyong Ayi says the Board under Olejeme has done very well.
“Well I must sincerely tell you that the board in my own assessment has done well and there is no perfect human being you cannot say perfect but you don’t need 100% to say you have passed an examination, sometimes it is 50/60/70 but for me the board has done well because I have seen a lot of improvement in the functions of organizations, I have seen a lot of employment because I am in labour”
Even from the defender of the Nigerian workers, the Nigeria Labour Congress, NLC, she has also been described as an exceptional leader according to Abdulwaheed Omar, former President of the Congress, the NLC is so far satisfied with the leadership of Olejeme.
“So far so good, because we have noticed with a lot of satisfaction the progress being made, despite the challenges I think the progress being made is appreciable”
But Olejeme says credit must be extended to other members of the Board, Management and Staff of the Fund for the successes recorded.
“I am just part of people that God used in bringing this vision to be we have very capable, very highly educated, very respected Nigerians that are on board of NSITF I just happened to the chairman but whatever we have done we have done together everyone including the GM, the deputy GMS and all the highranking to the lowest grade we have all you know worked together to bring what you have seen today so it’s not only the chairman that has done this that has done that.
“I cannot take the credit alone the credit 1st goes to Mr president who is magnanimous enough to see that the future of Nigerians could be better through NSITF and has given us the leverage to affect d life of Nigerians.so Nigerian youths Nigerian graduates today imagine taking off more than 6000 unemployed graduates out of the labour market It has done enough I mean the president has done enough and needs to be commended”