“Immunizing Nigeria from future economic shock”

Making life insurance mandatory for the nation’s workforce could be an invaluable way to provide long-term economic stability in Nigeria, writes Samasi Anderson, 20, a Commonwealth Correspondent from Bayelsa State.

A vibrant insurance sector contributes significantly to the expansion of the economy.

When the insurance sector is sound in an economy, there are several benefits. First, the economy does not rest on investments from capitalists for liquidity, second, the daily executions of the economy will have more than one guaranteed source of funding, third, financial institutions in the economy, such as banks, will not be easily susceptible to financial shock.

Unfortunately, the insurance sector in Nigeria is feeble. Why? Some possible causes rest on the shoulders of high premiums, piety, ignorance and/or poverty. Taken together, however, these root causes coalesce around one specific concern: that there is a significant lack of public policy being developed vis-à-vis the insurance sector.

One step in the right direction, I believe, would be to make life insurance mandatory for the nation’s workforce.

As an employee, having a mandatory life insurance policy is nothing to contest. Having this policy for a nation’s workforce is solely to make the employees the ultimate beneficiaries in the long-run. Note, this policy is not mandatory for each and every person in the workforce to be insured for life, but it is mandatory for each and every person in the workforce to get insured.

Paying premiums could be formulated as an automatic deduction from the employees wage. If this policy is in place in a nation, it will be a necessity for aspiring employees to subscribe to an insurance policy before their applications to be employees will be granted. More important, it will make insurance part of a political regions system of employment.

Moreover, having rural farmers subscribe to an insurance policy, for example, will be highly feasible and transparent if the government is fully involved in the process. The government can act as a middle-man between the farmers and their customers. The role of government as a middle man is to receive payments from the farmers customers for farm produce then give it back to the farmers; the government’s duty in the transaction, is a ‘conduit pipe’ for payment.

Before that plan can be effective, however, the government will have to ensure all small scale rural commercial farmers are profiled and ensure each and every profiled farmer has an insurance policy. Having government as a middle man will also be of a greater benefit to government, because other government policies regarding food production and other farm produce will be more effective.

Premium payment by rural small scale farmers can also deducted automatically. With government acting as a middle-man in the transaction, deductions can be made in accordance with the agreement between insurance companies and insurance policy holders (the rural farmers). The deductions may be of daily sales, weekly sales, monthly sales or annual sales depending on the accord between concerned insurance companies and policy holders.

photo credit: RTIfightsNTDs via photopin (license)
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About me: Everything about me is how to create better society, replacing each and every theory that has not worked for us. I am searching for how to reform the structure of things in Africa for the better.

I am so interested in getting new ideas in economics and politics, and want to meet people who think critically. I write only because I have an idea or a theory that I believe will put society in a better place.

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Opinions expressed in this article are those of the author and do not necessarily represent the views of the Commonwealth Youth Programme. Articles are published in a spirit of dialogue, respect and understanding. If you disagree, why not submit a response?
To learn more about becoming a Commonwealth Correspondent please visit: http://www.yourcommonwealth.org/submit-articles/

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