A dubious insurance scheme
The Federal Government recently appointed the National Insurance Corporation of Nigeria (NICON) to provide insurance cover to about 125,000 students in the 104 Unity Schools. This would come to annual premiums totalling 625 million naira. Each of the students is required under the scheme to pay mandatory sum of N5,000. Among the benefits for the compulsory participation is N500,000 in the event death of the insured, and N50,000 for injuries. The scheme’s proponents justified it on ground of ‘incessant attacks of schools by Boko Haram insurgents in parts of the country’; a loose standard for insurance is ever there was one.
Since it was launched, the scheme has been met with strong opposition by parents and guardians of Unity School students. They asserted that it was imposed on them without consultation. Despite the protests, however, the government appears determined to implement the scheme.
Among the principal grounds for its widespread rejection are that the security of lives and property in all parts of the country is the basic constitutional duty of government, and that by isolating the students of Unity Schools, even in locations that are not known to be affected by the Boko Haram insurgency for special insurance coverage, the government is embarking on a dangerous premise of selective treatment of the citizenry. This is particularly highlighted when it is considered that there is no linkage of the scheme to other school operators in the country such as state and local governments and private sector proprietors.
The initiative also smacks of failure by government to deliver with respect to the protection of lives and property of the affected students and, by implication, the rest of society. It portrays government as sub-contracting its vital duty of guaranteeing security to its citizens to a private firm.
In another vein, the circumstances of the transaction between the government and NICON indicate that the job may not have passed through due process as required by law. In the first place, it was neither advertised nor bid for, at least to acquaint the intended beneficiaries with the benefit of having the best package the nation’s insurance industry can provide. The package came as a bolt out of the blue to all, in particular the parents and teachers of the affected schools, even though the scheme is intended to be driven primarily by contributions by them. This is most unfortunate, and presents the initiative as a surreptitious manoeuvre to corner the unsuspecting students and their parents as well as sponsors into expenditures they had no knowledge of and ill-prepared to shoulder.
A troubling aspect of the transaction draws from the current status of NICON. The insurance company was previously owned by the Federal Government until it was privatised in 2006. Even as it is no more a government-owned enterprise, the law setting it up is yet to be reviewed in the light of its new status, thereby allowing it to retain the undue advantages of industry monopoly; especially the exclusive claim on government insurance business. This situation facilitates the diversion of dividends from misplaced government protection into private pockets.
More significant, the scheme exposes the worrying dimensions of the ongoing exercise of commercialization and privatisation of hitherto government-owned enterprises. This is a pointer to why the impact of the enterprise on the nation’s economy is yet to match expectations.
In the light of this, why would the Bureau for Public Enterprises (BPE) allow some lacunae in the rationalization of the status of privatized companies like NICON to stand, thereby allowing them to exploit undue advantages over their competitors in the economy? The Unity School project should be aborted and the entire transaction reviewed to conform to extant laws.