You need to active Javascript on your
BusinessDay
Nigeria's leading finance and market intelligence news report.

Reps mandates probe into misuse of W/Bank funds for Govt assets insurance

The House of Representatives on Tuesday mandated the Committee on Insurance and Actuarial Matters to investigate the irregularities, misapplication and alleged misappropriation of funds of World Bank Special Intervention Funds for Insurance of Government Assets and report back within four weeks for further legislative action.

The House urged the Federal Ministry of Finance, Budget and National Planning, the National Insurance Commission (NAICOM) and all Ministries Departments and Agencies (MDAs) to ensure proper actuarial valuation and adequate provision for Insurance Premium in the 2022 budget and subsequent national budgets.

The House reached the resolution, following the adoption of a motion on: ‘Need to Safeguard Critical National Assets through Budgetary Provisions for Insurance Premium by Ministries, Departments and Agencies’, sponsored by Ahmadu Jaha (APC, Borno).

Moving the motion, Jaha noted that critical national assets and infrastructure are assets, systems and items of value that support efficient public service delivery, economic, political, and social sectors of a nation.

He also noted that: “adequate budgetary provisions of Insurance Premium to safeguard the existing and ongoing Federal Government massive investments in the development and construction of various infrastructures would reduce avoidable government expenditure, engender value for money and support quick assets recovery, public service efficiency, employment generation and wellbeing of the Nigerian people.

“Further note that the administration, allocation and utilisation of the World Bank Special Intervention Funds on the insurance of Federal Government Critical National Assets in Nigeria have been shrouded in secrecy, lack of transparency, misapplication and allegations of misappropriation as well as not being captured in the Appropriation Act.

“Aware that the core mandates of the National Insurance Commission under the National Insurance Commission Act, 2004 is to ensure adequate protection of strategic Government assets and other properties; and to approve rates of insurance premiums to be paid in respect of all classes of insurance business,” Jaha stated.

Read also: Reps summon FCT Minister over infrastructural decay in Abuja

The lawmaker argued that Articles 6.1.5 and 6.1.3 of the 2021 Guidelines for Insurance of Government Assets and Liabilities for Ministries, Department and Agencies mandates all Ministries, Department and Agencies and Government-owned Enterprises (GOEs) to make adequate budgetary provision for their insurance coverage and conduct a proper actuarial valuation of government assets and liabilities for such provisions to the National Assembly for appropriation.

He expressed concern that some Government-owned Enterprises are alleged to have been allocating huge sums of monies to their presumed insurance cover without proper evaluation of their Insurable Assets, hence they do not submit their budget proposal to the National Assembly appropriation process like the MDAs.

Jaha was worried that the apparent MDAs/GOEs’ levity and unwillingness to insure public assets and conduct a proper actuarial valuation to provide for insurance premium in the annual budgets has led to incalculable economic losses which is a flagrant violation of the Insurance Act, 2003 and the Guidelines on the Insurance of Government assets and liabilities.

“Also worried that the misapplication and allegation of misappropriation of the World Bank Special Intervention Funds on Insurance of Federal Government Assets violates the operational ethos of Public

Service Financial Regulations, the Insurance Act, the Money Laundering (Prohibition) Act, the Code of Conducts Act and international best practices.

“Disturbed that the threats to Nigeria’s Critical National Assets and infrastructure have continued to escalate due to the situation of insecurity in the country, natural disasters, and other unforeseen circumstances.

“Cognizant of the need to take necessary measures to address the irregularities ravaging the insurance of Government Assets to cushion the burden that government would have to bear in the events of unforeseen occurrences, fire outbreaks, accidents, building collapse etc., thus saving the government avoidable expenditures which can be channelled towards augmenting other priority needs like agriculture and employment generation

“Also cognizant that proper actuarial valuation and adequate provision of insurance premium helps to ensure that cost-efficient finance is available for speedy assets recovery in the events of losses and quick restoration of public service delivery mechanisms to the citizens”, he added.

Get real time updates directly on you device, subscribe now.