A brewing dispute has emerged between Nigeria’s Federal Government and private sector organizations over plans to raise mandatory contributions to the Nigeria Social Insurance Trust Fund (NSITF) under the country’s workplace compensation program.
Employers currently contribute one percent of their total monthly payroll to the Employees’ Compensation Scheme (ECS) as required by the Employees’ Compensation Act of 2010. While officials have not disclosed the proposed new rate, business leaders are warning that any increase could force companies to cut jobs and close facilities.
The fund provides compensation for workplace injuries, death benefits, rehabilitation services, and medical care for employees hurt on the job.
At a recent stakeholder forum organized by the Ministry of Labour and Employment, Minister of State Nkeiruka Onyejeocha called for reviewing the compensation framework, expressing concern that families receive insufficient payments when workers die in workplace accidents.
“A safe workplace is not optional; it is a legal requirement,” Onyejeocha stated. “When workers die, their families are often given what can only be described as inadequate compensation. This narrative must change.”
The minister emphasized that workplace safety should be viewed as an investment rather than a cost, urging employers to register properly, make regular contributions, and maintain robust safety systems.
However, business representatives pushed back against the proposed increase. Dr. Steve Ojeh, Director of Corporate Services at Seplat Energy, warned that higher levies could trigger job cuts, hamper investment, limit employee incentives, and force factory closures.
Speaking through a company representative, Ojeh noted that employers already face over 75 different taxes and levies, along with economic pressures and administrative inefficiencies. “We would have preferred that the rate be reduced, but it should be left where it is rather than increased,” he said.
Labour and Employment Minister Muhammadu Dingyadi called for cooperation among government, employers, and labor groups to improve workplace safety standards in line with international best practices.
Representing organized labor, National Treasurer of the Nigeria Labour Congress Aliyu Haruna described the 2010 Act as “a landmark reform in Nigeria’s labour and social protection framework.” He stressed that successful implementation requires better awareness, digitized claims processing, expanded coverage, stronger enforcement, and sustained political commitment at all government levels.
“Strengthening the ECA 2010 will not only reduce the socio-economic burden of workplace injuries and fatalities but also promote a national culture of safety, accountability, and social justice,” Haruna added.
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