At the 9th NAIPE Annual Conference held today at the Oriental Hotels on Lekki-Ajah Expressway, Victoria Island, Lagos, Dr. Afolabi Olowookere, Managing Director and Chief Economist, Analys, Data Services and Resources, delivered a keynote address that highlighted the central role of the finance and insurance sectors in driving Nigeria’s economic growth. Themed “Towards a $1 Trillion Economy: Roles of Insurance and Pension Sectors,” the event was chaired by Mr. Fola Daniel, former Commissioner for Insurance and Managing Director/CEO of FSB Reinsurance Limited.
In his address, Dr. Olowookere noted that while most sectors of the economy have seen minimal growth, the finance and insurance sectors have shown resilience and substantial expansion. “The financial and insurance sectors contribute around 6.6% to Nigeria’s GDP. While this may seem moderate, their growth outpaces most other sectors and is pivotal to driving broader economic activities,” Olowookere explained.
He compared the performance of other sectors, pointing out the sluggish growth in agriculture, which expanded by just 1.41%, and the mining sector, which managed 1.79% despite an increase in oil prices. Transportation and storage, as well as other services, have seen contractions, further emphasizing the importance of the financial and insurance sectors as the primary engines of growth.
“Other sectors are growing, but very slowly in comparison. The finance and insurance sectors are the major drivers, and although their GDP contribution is relatively small, their rapid growth is a positive sign for the economy,” Olowookere continued.
Economic Challenges
Dr. Olowookere provided a detailed breakdown of key economic indicators, summarizing that overall productivity and output in the Nigerian economy have been underwhelming. He noted that Nigeria’s external balance remains weak, but the financial sector has performed relatively better, benefiting from favorable exchange rates and increased dollar inflows.
“Both the financial sector and government finances are benefiting from exchange rate adjustments. As more foreign currency flows into the country, there’s more money available for distribution at various government levels,” he said.
The conference also provided a platform to discuss labor force dynamics in Nigeria. Dr. Olowookere shared insights from new data released by the National Bureau of Statistics (NBS), which redefines Nigeria’s labor force to include individuals aged 15 and above, regardless of retirement status.
“Nigeria has a population of about 230 million, and out of that, 116.6 million are of working age. However, not all of them are part of the labor force. As of the latest statistics, about 88.9 million people are actively working or seeking work, but there is still a significant portion of the working-age population that is inactive,” he explained.
Insurance and Pension Coverage
One of the critical areas discussed was the coverage of pensions and health insurance among the labor force. Despite Nigeria’s growing workforce, only 26.3% of eligible workers have access to pensions or health insurance. This, according to Dr. Olowookere, is an area that requires immediate attention from both the government and private sectors to ensure wider social protection for the growing labor force.
Mr. Fola Daniel, who chaired the event, echoed these concerns and emphasized the importance of the finance and insurance sectors in building a sustainable path toward Nigeria’s $1 trillion economy vision. He urged stakeholders to continue investing in financial infrastructure and insurance systems to support broader economic growth.
Key Takeaways:
– The finance and insurance sectors are leading Nigeria’s economic growth, contributing 6.6% to GDP while other sectors experience slow or negative growth.
– Agriculture and mining are growing at minimal rates, while transportation and storage have contracted.
– Nigeria’s labor force has expanded to include 88.9 million active workers, but less than a third have access to pensions or health insurance.
– Favorable exchange rates are benefiting both the financial sector and government finances, improving dollar inflows and distribution capabilities.
The 9th NAIPE Annual Conference concluded with a call for greater collaboration between the public and private sectors to strengthen financial inclusion and expand the reach of insurance and pension systems across the country. Participants left with a renewed focus on the role of the finance and insurance sectors in achieving long-term economic growth for Nigeria.