Social Security: The Nigerian Experience


What is Social Security?

SOCIAL security means measures, processes and systems aimed at providing, maintaining and ensuring a humane and dignified standard of living not only for those working but for general citizenry who for one reason or the other are incapacitated and unable to earn a living. In a broader context, all vulnerable groups need social security. The most vulnerable group consists of those who have neither physical endowment nor financial resources for gainful employment and therefore they do not have the purchasing power to afford a minimum standard of living.

International Legal Frameworks for the Provision of Social Security

International human rights instruments provide a legal framework for the reduction of poverty. Chinkin (2001) asserts that a rights-based approach allows links to be made between otherwise disparate issues and given legal weight and content to many of the concepts that are traditionally seen and analysed in terms of development, management and welfare.

The International Labour Organisation (ILO), since inception, has been adopting resolutions, recommendations and Conventions on various aspects of social security. In 1952, a comprehensive convention (No. 102) concerning Minimum Standards of Social Security was adopted in which provisions were made for medical care, sickness benefit, unemployment benefit, old age benefit, invalidity benefit, employment injury benefit, family benefit, maternity benefit and survivors benefit. Subsequently, ILO formulated a number of Conventions and Resolutions amplifying and extending the scope of the various measures of social security.

Nigeria Legal Framework for the Provision of Social Security

Nigeria has ratified the Social Security (Minimum Standards) Convention 1952 (No. 102). ILO expects members that have ratified its conventions to be bounded by them. However, in Nigeria, a treaty must first be domesticated or passed into law by the National Assembly before it can have the force of law. Some aspects of the Convention have been domesticated into national laws and are discussed below:

Nigeria’s 1999 Constitution (As Amended 2011)

The Constitution, in section 14(2)(b), states that security and welfare of the people shall be the primary purpose of government. Section (17(3)(f) states that children, young persons and the aged are protected against any exploitation whatsoever, and against moral and material neglect, while subsection (3)(g) of the same section, states that provision is made for public assistance in deserving cases or other conditions of need.

Other Laws that Carry Components of Social Security

There are other laws that make provision for components of social security. They include the Pension Reform Act 2014; Labour Act; National Health Insurance Act 1999; Employees Compensation Act 2010

The Role of the State in the Provision of Social Security

The question is: who should provide social security? Social security is an essential component of government’s programme and represents its obligation to provide adequate living standards for its citizens. The State, through its government will, regardless of the structure of the scheme; also have key roles in the governance of social security. This will either be directly, through the discharge of its responsibilities, or indirectly, through creating environment and framework to enable employers, employees and beneficiaries to carry out their roles and responsibilities. The Social Security (Minimum Standards) Convention, 1952 (No. 102), makes it clear that the overall responsibility for the proper administration of the scheme and its institutions lies with the State.

Social Security Provision: The Nigerian Experience

We will now proceed to examine the various components of social security in Nigeria, in the context of the above referenced conversation.

Medical Care

Most of the risks for which conventional social security is designed are related to health. They relate to employment injury, sickness, invalidity, disablement and maternity. The connection between ill-health and poverty, with each being a principal cause of the other does not need to be over emphasised.

Medical care is an area of social security, where Nigerian governments (Federal, States and Local) have made tremendous impact, with the establishment of several teaching hospitals, general hospitals, health centres and medical research institutes. The paradox is that these public health institutions are being neglected by these governments as they are ill-equipped and the infrastructures are decaying as a result of poor funding. Patients pay for drugs and cost of hospitalisations including surgery, etc. Therefore, the journey remains a long one before beneficial and sustainable health services become effective enough to provide adequate care. For those who can afford it, going to private hospitals or clinics is definitely better in terms of treatment and safety.

In an attempt to address medical care, the National Health Insurance Scheme (NHIS), a public health system, was officially established in 1999 with the purpose of providing universal health coverage. However, due to many flaws over the years, the ability of the system to provide free and good healthcare for the entire population has been a mirage. Only workers in Federal Public Service and the organised private sector are covered by the scheme. The managers of the scheme have failed to extend its coverage to retirees, who were members of the scheme during their working lives.

Unemployment Benefits

The essential role of unemployment benefits is to provide income security during spells of involuntary unemployment. In Nigeria, there is no unemployment protection and therefore no unemployment benefits. However, the Pension Reform Act 2014 makes provision for some level of payment during frictional unemployment. Section (7)(2)  of the Act provides that where an employee voluntarily retires, disengages or is disengaged from employment as provided for under section 16(2) and (5) of the Act, the employee may, with the approval of PenCom, withdraw an amount of money not exceeding 25% of the total amount credited to his RSA, provided that such withdrawals shall only be made after four months of such retirement or cessation of employment and the employee does not secure another employment.

This provision is to assist contributors during the period of frictional unemployment, the period between employments, when a contributor has lost a job and is waiting to get another.

Old Age Benefits

The most useful old-age benefit in social security is a life pension. Pension is a retirement plan that provides monthly income in retirement. ILO defines pension as old age benefits or old age protection, which covers, if not all the population, at least a section of it.

In Nigeria, pension has received significant attention since the establishment of the first public sector pension scheme, the Pension Ordinance of 1951, which had a retrospective effect from January 1, 1946. The Pension Reform Act 2014 established a Contributory Pension Scheme for employees of public and private sectors. The scope of the scheme was recently expanded to cover self-employed professionals and workers in the informal sector, through the Micro Pension Scheme.

Invalidity Benefits

Invalidity, as a subject of cash benefits under social security, is more often than not grouped together with old age and survivors benefits. In one sense, invalidity benefit may be regarded as an early retirement pension, granted in prescribed circumstances, such as mental or physical incapacitation. All Nigerian pension schemes have always incorporated invalidity benefits. Pension Reform Act 2014 also incorporates invalidity benefits. Section 16(2) provides that any employee who is disengaged from employment on the advice of a suitably qualified physician or a properly constituted medical board certifying that the employee is no longer mentally or physically capable of carrying out the functions of his office; due to total or permanent disability either of the mind or body shall be entitled to make withdrawals in accordance with section 7 of the Act.

Employment Injury Benefits

Employment injury benefit, although not the oldest, is certainly the most widely adopted branch of social security. From the onset in Nigeria, the Workmen’s Compensation Act (CAP 124) Laws of Federation 1990, placed upon employers statutory liability for the treatment and compensation of an employee who suffered from employment injury or employment disease.

The level of compensation was determined by the level of injury suffered. The Employee Compensation Act 2010 replaced the Workmen’s Compensation Act. It was established to provide an open and fair system of guaranteed and adequate compensation for employees or their dependents for any death, injury, disease or disability arising out of or in the course of employment.

Family Benefits

Family allowances, as a benefit of social security programme, rests upon a foundation distinct from that of other cash benefits. Other benefits schemes stand ready to provide a guaranteed income against the day when regular wages are interrupted or are relinquished in old age. In Nigeria, while a certain analogy can be drawn between sickness benefits and injury, the expense of raising a family has not been viewed as a contingency against which the individual or community should be protected through social insurance.

Maternity Benefits

Maternity benefit is a measure of international concern for the working mother, prompted no doubt by the growth in the number of women entering industrial and factory life, that one of the earliest Conventions to be adopted by the International Labour Organisation (ILO) at its first annual International Conference was the Maternity Protection Convention, 1919 (No. 3). The purpose of Convention No. 3 was to ensure that a woman worker should be able to sustain and care for herself and her baby over the period immediately before and after her confinement.

Nigeria, in keeping with her membership of ILO, has not only ratified the Convention, she has also domesticated and made it part of its national laws, by making provision for maternity leave in Labour Act (CAP. 198) Laws of the Federation 1990.

The Act provides that a woman, whether in a public or private organisation, is entitled to be absent from her work six weeks before her confinement and six weeks thereafter, if she produces a medical certificate from a medical practitioner to that effect. However, no employer shall be liable to, in his capacity as an employer, pay any medical expenses incurred by a woman during or on account of her pregnancy or confinement. She will however collect her full salary during the period.

Survivors Benefits

Pension Reform Act 2014 in section 8, provides that where an employee dies, his entitlements under the Life Insurance Policy maintained under section 4(5) of the Act shall be paid by an underwriter to the named beneficiary in line with Section 57 of the Insurance Act. Upon receipt of a valid will admitted to probate or a letter of administration confirming the beneficiaries under the estate of the deceased employee, the PFA shall, with the approval of PenCom, release the amount standing in the RSA of the deceased to the personal representative of the deceased or to any other person as may be directed by a Court of competent jurisdiction, in accordance with the terms of the will or personal law of the deceased employee, as the case may be.

Funeral Benefits

A single lump sum benefit to assist in meeting the cost of funeral and associated expenses on the death of an insured person has long been a feature of sickness insurance scheme. In Nigeria, the formal sector of the economy provides this lump-sum benefit on the death of an employee to take care of some of the burial expenses. This benefit is not a product from any insured scheme, neither is it covered by any law. It is a product of collective agreement.


Only workers in the public sector and organised private sector of Nigeria are covered by any form of social security, leaving the vast majority in the informal sector that constitute about 90% of the workforce and the vulnerable groups without any form of social security.


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