Leave a comment and share
Chuks Udo Okonta
The National Insurance Commission (NAICOM) has called for insurance contents in all government’s development interventions that would help deal with associated risks and ensure sustainability and guarding them against failure.
The Commissioner for Insurance, Sunday Thomas, who said this at the recently held workshop it organised to educate MSMES and stakeholders in Lagos, noted that the importance of MSMEs to national development cannot be overstated, as it is indeed the fulcrum of a nation’s growth and development.
According to him, MSMEs form the superstructure to stimulate mass enterprise growth and serve as a source of livelihood for the base of the pyramid population across all economies be it underdeveloped, emerging or frontier markets.
He posited that in Nigeria, all development interventions of the current administration have had components focused on enabling these MSMEs sprout and flourish, but unfortunately, with little or no insurance content to deal with associated risks and ensure sustainability and guarding them against failure.
“According to the National Bureau of Statistics, Micro, Small and Medium Enterprises (MSMEs) in Nigeria have contributed about 48 per cent – on average – to the national Gross Domestic Product (GDP) in the last five years from a total of about 17.4 million enterprises (NBS 2019). They account for about 50 per cent of industrial jobs and nearly 90% of activities in the manufacturing sector,” he said.
Thomas maintained that while some challenges still abound from infrastructure to funding, it is encouraging that the Federal Government through its deliberate policy of removing 100 million Nigerians from poverty in the next 10 years is taking on the challenges to build businesses and leverage them to create prosperity.
He noted that in addition to the efforts of the government at all levels, the spirit of entrepreneurship of Nigerians is driving creativity and productivity, stressing that however, the concern is that whatever gain or progress made in this sector can be halted abruptly in the face of a natural or man-made disaster which can often prove daunting to surmount without any support.
“In particular, when MSMEs are affected by any mishap, the disruption produces not only direct business losses, but also indirect losses and economic ripple effects.
“The range of impact include job losses, debt overhang, and a relapse of households into extreme poverty.
“While the risks that expose MSMEs to this type of vulnerability may not be within the scope of human control, what is within human reach is a deliberate risk management plan through Insurance, It gives you confidence to venture,” he submitted.
The NAICOM boss said insurance is that product you buy when you think you do not need it because it may be too late to buy it when the need for it arises.
He remarked that notwithstanding the importance of Insurance to lives and property, adoption and penetration have been low in Nigeria owing largely to a lot of challenges principal of which may be the inadequate product offerings that meet the needs of the consumers including the MSMEs.
He said consequently, the MicroInsurance and Takaful are two insurance offerings carefully designed for affordability and inclusiveness to bring Insurance within the reach of one of the nations most valued contributors to the economy-the MSMEs, adding this will support the sector for speedy recovery when unforeseen situations occur.
