The federal government has allocated funds for the group life insurance of its workers in the 2026 budget, despite persistent inflationary pressures that continue to strain public finances and household incomes. The provision forms part of the national budget presented to the National Assembly by President Bola Tinubu and reflects the government’s statutory obligation to insure its employees.
The allocation is largely in line with the previous year’s provision, a development that has drawn mixed reactions from analysts and industry stakeholders. While some view the budgetary inclusion as a sign of continued commitment to employee welfare, others argue that the figure does not adequately reflect rising inflation and the increased cost of insurance coverage.
Insurance analysts noted that government spending on group life insurance remains modest relative to the size of the workforce and the broader budget, reinforcing concerns that insurance is still not prioritised as a key driver of economic growth. They argue that this long-standing trend has contributed to the insurance sector’s weak contribution to national output.
Data from the National Bureau of Statistics show that insurance penetration remains below one per cent of gross domestic product, highlighting the sector’s limited impact on the wider economy. Stakeholders say stronger government participation, particularly through adequate insurance of public assets and personnel, could help deepen the market and build public confidence.
Some analysts, however, pointed to higher allocations to the health sector, which include health insurance components, as a potential positive signal for the insurance industry. They said increased spending in this area could indirectly support insurance growth through schemes linked to healthcare coverage.
Conversely, reduced budgetary emphasis on infrastructure has raised concerns among insurers, who typically benefit from compulsory insurance covers tied to large construction and capital projects. Lower infrastructure spending, they said, could limit opportunities for premium growth in the coming year.
Under the Pension Reform Act, employers are required to maintain a group life insurance policy for their employees, with a minimum cover tied to annual remuneration. In line with this requirement, the federal government makes yearly budgetary provisions for group life insurance, covering public servants and members of the National Youth Service Corps.
Industry watchers say expectations remain that future budgets will better reflect economic realities and inflationary trends, ensuring that workers’ insurance cover is both adequate and compliant with the spirit of the law.
