• Sunday, July 14, 2024
businessday logo

BusinessDay

Insurers seek effective monitoring, implementation of 2021 budget for growth

Insurers seek effective monitoring, implementation of 2021 budget for growth

To put the country on the part of economic recovery and growth, insurers have called for effective monitoring and implementation of the 2021 budget.

While they appreciate the early passage of the budget, they said this has become necessary to ensure that the economy currently affected by the impact of Covid-19 and currently struggling with recession is supported quickly to survive.

President Muhammadu Buhari had recently signed into law the 2021 budget put at N13.6 trillion which some said was early enough to ensure implementation.

Ademayowa Adeduro, managing director, Law Union & Rock Insurance, while commenting on the budget said passing the budget early by this present administration is commendable, adding that the early passage of the budget, gives hope that the budget implementation will start in earnest to help the country in its economic recovery.

Adeduro said the about 33 per cent allocation for capital expenditures is grossly inadequate, noting that an insurer would have preferred that more allocation was given to capital expenditures than recurrent.

Read also: How insecurity, multiple taxations hurt agribusinesses

He said the infrastructure deficit is what is causing problems in the economy, calling on the government to always give more allocation to the capital expenditures to touch the lives of the people.

On insurance, he said if there is a reduction in the Covid-19 spike and rise in oil price in the international market in 2021 above the $40 budget benchmark, the government will have enough money to fund the budget especially the capital expenditures that will translate to more developmental activities.

“When there’s more road construction, housing development, rural electrification, the building of the new school and hospitals, the common man will benefit, the insurance industry will benefit and the nation will grow. That’s why l said earlier that more allocation should be given to capital expenditures,” Adeduro said.

In his contribution, Segun Bankole, deputy general manager, Marketing and Corporate Communication, Sovereign Trust Insurance Plc, expressed displeasure on the wrong approach of our leaders towards budget implementation.

Bankole, who described the budget as a “yearly ritual” by the government, said any budget with higher allocation for recurrent expenditures with little for capital expenditures has nothing to offer the common man.

He expressed regret that the past budgets passed by the government have nothing to show, no impact, our roads are still in deplorable condition, our educational system is nothing to write home about and insecurity is the order of the day.

“Every year the government will read the budget at the end nothing is done, nobody cares to know how the budget was spent. No proper monitoring, implementation zero. That’s why the country is where it is today.

“If our past budget cannot take care of our education, healthcare, roads, housing, security amongst others, then what’s the need for the budget.

On insurance, he said there are lots of issues, noting that the government who is the largest spender in the economy is not playing her part well when it comes to insurance.

Apart from not insuring, he said adequate regulation is not being put in place to ensure the growth of the industry and called on the government to ensure that the issue of insuring government assets is taken seriously by all ministries, departments and agencies (MDAs).

“Government should show a good example in meeting her insurance obligations on yearly basis as well as ensure enforcement of the compulsory insurance. The government should look into the issue of regulations. The insurance industry needs that regulations that are growth-driven, which will make the industry attractive for investors. It’s no longer news that insurance stocks are penny stocks. How many people will like to invest where they will not get returns?

“The National Insurance Commission, our primary regulator, needs to do more by putting a stop to rate-cutting and other unhealthy/unwholesome practices that are inimical to the industry’s growth,” Bankole advised.