Budget:   FG Allocates N17.3bn to Group Life Insurance of its Workers

Ebere Nwoji

Despite the high inflationary trend plaguing the country, the federal government has budgeted a total of N17.3 billion for the group life insurance of its workers. This is out of N58.47 trillion total budget for 2026 presented to the joint session of National Assembly by President Bola Tinubu on December 19.

In this year’s budget year, the government allocated N17.31 billion to the group life insurance of its workers out of a N54.99 trillion budget approved for the country for the year.

Analysts said that was an indication of the place of insurance in national economic growth.

Many believe the federal government is not very mindful of the security of its assets, which could be safeguarded through insurance, and is also paying lip service to the welfare of workers in terms of group life insurance.

According to analysts, this lack of regard for insurance has been instrumental to the slow growth of insurance and the trend has continued for many years, leading to infinitesimal contribution of the sector to the national economy.

For instance, up till last year, insurance contributions to GDP was still less than one per cent, according to statistics by the National Bureau of Statistics.

However, sector analysts said allocation of six per cent of this year’s budget to health sector, which covered health insurance, will be beneficial to insurance sector.

Allocations in the health sector (totalling six per cent of the budget) also covered the National Health Insurance Scheme (NHIS), which involves the insurance sector.

On the other hand, analysts said allocation of N3.56 trillion to infrastructural projects in this year’s appropriation bill, as against N4 trillion allocated in 2025 budget, had dashed hope of higher performance of insurance sector in 2026 year. This is because when allocation to infrastructure is high, insurers reap bountifully from infrastructural project execution, as the project must have insurance cover.

Section 9, sub section 3 of PRA  2014 requires employers to maintain a life insurance policy for all their employees. The act further mandates employers to pay at least three times the employees’ gross annual total remuneration into group life insurance policy.

In compliance with the law, the federal government, as employer, makes provision through annual budgets for group life insurance of its workers, including members of National Youth Service Corps (NYSC).

The amount allocated each year depends on available funds, but expectations are high that given the high inflationary trend government’s allocation to group life insurance of its workers would have been much higher than last year.

But the reverse is the case, as the allocated figure is a little lower than last year’s figure. In 2024, government allocated N9.6 billion to group life insurance of its workers, in 2025 it almost doubled the figure, allocating N17.31 trillion for the same purpose.

But in 2026, it lowered the figure, instead of increasing it, as group life insurance allocation stood at N17.3 billion for 2026, despite inflation.