• LCCI estimates losses at about N700b, economists say over N1tr lost to mayhem
• Insurers settled N5.4b #EndSARS claims
• Private sector, govt yet to recover from #EndSARS, says ex-LCCI boss
Besides authorities’ resistance to activities commemorating one year anniversary of #EndSARS protests this week, the Federal Government appears to be haunted by worries of social resistance in implementing certain policies that can reduce its dependence on borrowing and expenditure on subsidies.
Government’s challenges are coupled with the fact that many Nigerians are currently struggling to sustain daily living due to rise in food prices and inflationary trend on basic household essentials, amid dwindling incomes.
While the #EndSARS crisis was primarily a fall-out of demand for the disbandment of the Special Anti-Robbery Squad (SARS) and other police reforms, it later became an agitation for governance overhaul.
Indeed, the level of carnage that was witnessed as a result of the social unrest last year remains unprecedented with the effect still visible on the morale of policemen. While the Lagos Chamber of Commerce and Industry (LCCI) estimates about N700 billion as losses in economic value to the mayhem, other economists put the loss above N1 trillion.
ONE year on, many businesses are yet to be compensated while the insurance industry has not extended its coverage to the impact of disasters from the unrest.
In August, the Nigerian Insurers Association (NIA) said insurance companies had paid over N5.4 billion in claims settlement arising from #EndSARS losses.
The NIA Director-General, Yetunde Ilori, said: “There is a privacy policy regarding insurance. For the #EndSARS period, we have paid over N5.4 billion in settlement of claims. As an umbrella body, we would summarise what we are doing in terms of insurance claims payment later.”
Also, Chairman, NIA, Ganiyu Musa, said about 2,000 insured businesses were affected by the violence. He said insurance operators were still collating claims, stressing that every genuine claim would be settled.
Recent figures show 25 insurance firms have recorded claims totalling N20.4 billion from losses that emanated from the #EndSARS protests, while the companies have set aside a reserve of N13.2 billion to settle the claims.
The NIA DG added: “Out of a total of 1,661 claims that we have received, 143 have been fully settled; a total of N105 million claims had been paid; 539 claimants are yet to substantiate their claims with the necessary documents; seven claims were repudiated because they were not covered by any of the policies; while 972 claims are going to be settled.”
Out of the number of claims received, 667 of the claimants were from Lagos.
On the development of insurance schemes to address impacts of social unrests, stakeholders urged underwriting firms to extend their comprehensive policies to cover high risks such as storms, earthquakes, arson, and mass destruction emanating from social unrest, for them to meet the N1 trillion premium income target and contribute immensely to the Gross Domestic Product (GDP) of the economy.
The experts, who spoke with The Guardian, are of the opinion that only four per cent of first-tier insurers can afford special insurance products against such loss.
Executive Brand Management and Corporate Communications/Customer Engagement, Social Media Campaign, International Energy Insurance Plc, Tamuno Kari, described social unrest as a business risk that business owners are concerned about, especially underwriting firms that bear losses that emanate from such situations.
According to Kari, the implication to the industry is that some insurance companies provide in their comprehensive policies against fire, earthquake, storms and vandalism as a result of public unrest, even though, the rates charged for such policies are much higher than regular comprehensive policies against fire, road accidents, burglary, and theft.
“The situation of the Nigerian economy, which has dictated low disposable income has made insurance companies in the country to play safe by not extending their comprehensive policies to cover high risks such as storms, earthquakes, others emanating from social unrest,” he stated.
Makinde Police Station. PHOTO: FEMI ADEBESIN-KUTI AND AYODELE ADENIRANThe Independent Director, Saham Unitrust Insurance Co. Limited, Adebayo Adeleke, told The Guardian that social unrest is manifested in mob action with its attendant destruction, looting, vandalisation, among others.
“The implication for insurance companies is a huge claim payout where affected persons or businesses are insured. Insurance exists as underwriters of risk. Where and when the risk crystallises, the insurance is duty-bound to pay the insured to offset losses incurred by the insured.
“The industry has several products that cater to various categories of risk. The culture of insurance is just growing especially amongst the masses. Religious beliefs have held many people back from facing the reality that the unexpected does happen,” he stated.
FROM currency pressure to increased prices in Liquefied Petroleum Gas (LPG)/cooking gas and Automotive Gas Oil (AGO) or diesel, Nigeria’s core inflation remains high and reflecting in other commodities.
Although the economy witnessed an incremental deceleration in inflation over the last couple of months, high inflationary pressures remain a major concern to stakeholders in the Nigeria economy.
At about $85 a barrel, Nigeria is yet to witness the impact of the improved earnings from crude oil on its external reserves, alongside rising subsidy payments.
With a proposal to remove both electricity and fuel subsidies by 2022, there are concerns about how to implement the proposals quietly without creating uproar from labour unions and citizens, an example being a slight electricity tariff adjustment implemented quietly last week without notifying consumers.
With the international oil benchmark, Brent crude, at $84.86 per barrel, the landing cost of imported petrol is expected to increase, spiking the pump price of petrol.
The price of diesel has already skyrocketed beyond N330 per litre, an indication that may further worsen the plight of local manufacturers and businesses that largely rely on the product for power generation in the face of erratic power supply in the country.
Amid plans to increase electricity tariff from January as part of the implementation of the Multi-Year Tariff Order (MYTO), stakeholders are worried about increase in prices of goods and services, high inflation, foreign exchange challenges as well as poverty surge.
Though Nigeria’s headline inflation in the month of September 2021 dropped further to 16.63 per cent compared to 17.01 per cent recorded in the previous month, a decline described by the Statistician-General of the National Bureau of Statistics (NBS), Simon Harry, as reflective of government’s intervention, rising food prices appeared to have defied all odds going by the steep rise in many basic commodities, month-on-month.
Specifically, core inflation reversed the moderation witnessed in August as it increased by 47bps to 1.24 per cent month-on-month in September in line with the increase in the prices of energy and household appliances.
“Our sole responsibility is in terms of producing the data that concerns some of these developments. It is not our responsibility to formulate policies that will control some of these negative happenings.
“We go beyond our responsibility to identify some factors responsible for some of these problems and then present them to the policymakers and advise them to come out with policies to help strengthen the system so we have a better system,” Harry added.
HOWEVER, an economist and Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said many investors and state governments were yet to recover from the destruction of public facilities and businesses during the #EndSARS protest in October 2020, adding that the economic implication of the protest was enormous due to the wanton destruction of public and private property after it was hijacked by hoodlums.
He noted that the way forward was for government at all levels to strengthen engagements with citizens. “These were complaints that had been on for a number of years and because these complaints were not addressed, it eventually led to an implosion.
“When people have grievances and those grievances are not addressed promptly, it leads to an accumulation of anger, and any little trigger can cause chaos.”
THEGUARDIAN
