Despite rising inflationary pressures across the country, the federal government has allocated N17.3 billion for the group life insurance of its workers in the 2026 budget.
This allocation forms part of the N58.47 trillion total budget presented to a joint session of the National Assembly by President Bola Ahmed Tinubu on December 19, 2026.
Analysts have expressed concerns over the allocation, noting that it reflects a continued de-emphasis on the role of insurance in national economic growth.
Last year, the government allocated N17.31 billion for the same purpose out of a total budget of N54.99 trillion, meaning the 2026 figure is marginally lower despite mounting inflationary pressures.
Experts argued that the consistent underinvestment in insurance has hindered the sector’s growth, limiting its contribution to the national economy.
Statistics from the Nigeria National Bureau of Statistics indicated that insurance’s contribution to GDP remained below one percent as of 2025.
Analysts warned that the government’s approach demonstrates a lack of prioritization for safeguarding public assets and staff welfare through comprehensive insurance coverage.
However, there are some positive signs.
The 2026 budget allocated six percent of total funds to the health sector, which includes provisions for the National Health Insurance Scheme (NHIS).
Analysts suggested that this could indirectly benefit the insurance industry by expanding coverage and enhancing sector participation.
On the downside, the budget earmarks N3.56 trillion for infrastructural projects lower than the N4 trillion allocated in 2025.
Analysts noted that higher infrastructure spending usually benefits insurers because large-scale projects require extensive insurance coverage.
The reduced allocation is therefore seen as a missed opportunity for the sector.
Under Section 9, Subsection 3 of the Pension Reform Act (PRA) 2014, employers are required to maintain life insurance policies for all employees, paying at least three times the employees’ gross annual remuneration into group life insurance schemes.
The federal government, as an employer, complies through annual budgetary allocations covering civil servants and members of the National Youth Service Corps.
Critics argued that given the persistent inflationary environment, the group life insurance allocation should have increased significantly rather than remain stagnant or slightly lower than the previous year.
Historical figures showed the trend: in 2024, N9.6 billion was allocated, rising to N17.31 billion in 2025, only to dip slightly to N17.3 billion for 2026.
Analysts maintained that unless government allocations reflect the rising cost of living and the real value of insurance, the sector will continue to underperform, limiting its potential to contribute meaningfully to national economic stability.
