Tackling Building Collapses In Nigeria Requires Multi-Sectoral Approach, Tony Elumelu Says
Extraordinary entrepreneur Tony Elumelu has said dealing with the root cause of building collapses in Nigeria requires a multi-sectoral approach.
The chairman of Heirs Holdings Group – owners of Heirs General Insurance and Heirs Life Assurance – disclosed this during his keynote address at the 2023 NATIONAL INSURANCE CONFERENCE in Abuja on Monday, October 23, 2023.
Speaking on the topic “Redefining Safety: Insurance Solutions for Public Buildings and Buildings under Construction” Mr Elumelu who agreed Insurance sector has role to play in mitigating the effects of building collapses maintains professional bodies such as the Council for the Regulation of Engineering in Nigeria (COREN), Nigerian Institute of Estate Surveyors and Valuers (NIESV), and Nigerian Society of Engineers (NSE) must also awake to their responsibilities.
Referencing one of the building collapses that left many shocked not too long ago, the African business leader said “Like many of the people in this room, I woke up one morning last year to the news of the unfortunate incident that happened in Ikoyi, Lagos, where a building still under construction collapsed, killing many people, including the promoter of that project. That is just one of the many tragedies of building collapses that occur in Nigeria.
“According to the Building Collapse Prevention Guild (BCPG), over the past 49 years, our country has recorded 533 building collapses.That is an average of 11 such tragedies per year. In 2019 alone, there were 43 RECORDED building collapses. And these building collapses wreak havoc on Nigerians, with lives lost. A further estimated 36,000 buildings face impending collapse in the country.”
He further submitted that “There is a role for insurance, but there are roles for professional associations such as: The Council for the Regulation of Engineering in Nigeria (COREN). The Nigerian Institute of Estate Surveyors and Valuers (NIESV)…The Nigerian Society of Engineers (NSE).
“So, this is a problem that requires a multi sectoral approach to holistically deal with the root cause of building collapses in Nigeria.”
Elumelu who said needs of basic amenities such as ports, roads, Power stations, schools, hospitals and homes cannot happen except building codes and legislation are not adhered to, insisted “Insurance should be as central to our construction industry, as the concrete that binds our buildings.”
Rounding up his address the chairman of Africa’s Global Bank, United Bank for Africa (UBA) and founder of Tony Elumelu Foundation – the philanthropic initiative through which he has empowered hundreds of young entrepreneurs and more across the continent of Africa – said:
As I conclude, let me reiterate my firm belief in the strategic role of Nigeria’s insurance sector. The reasons we are failing to enforce the insurance of public buildings in Nigeria is indicative of much wider issues within the insurance industry.
Why is it that Nigeria has built a banking sector that operates across Africa, why is it that UBA can operate in New York, in Dubai, in London, in Paris? Why is it that our insurance sectors is woefully behind, undersourced and undercapitalised?
Our people have access to digital banking, I helped democratize banking, why are we not democratizing insurance?
In two short years Heirs Insurance Group has grown exponentially, but we scratch the surface – I want to see our sector grow in the same way. I embrace competition, but I know if we, the government, regulators and industry players work together, we can create an enormous market that serves the greater good.
Consequently, I propose as follows:
We should increase the capital base of Insurance Companies to N20Billion for Life and N30Billion for Non-life respectively.
Review the dichotomy in Insurance authorisations/licences between life and non-life. Consolidated operators should have N50Billion. Let us use regulation to shape behaviour and enforce compliance.
NAICOM should focus on substance and things that will shape the sector and stop approving adverts. Use that time for more important aspects of regulation and save taxpayers money for more catalytic actions.
All insurers should mandatorily contribute 0.5% of total revenue to drive industry awareness for 5 years. NIA should administer this professionally.
Insurance Brokers capital base should be increased to N1Billion.
NAICOM should allow brilliant minds to come into the insurance sector and limit years of experience only to technical areas. Let us open the insurance sector in Nigeria to our young and innovative minds.
With the right enabling environment, we will see the transformation of the Nigerian insurance sector.
Let me emphasize that our regulators and the government have a critical role to play in making insurance a common right of every Nigerian citizen.
It is embarrassing that Nigeria has less than 2% insurance penetration, in a nation of over 200 million people, struggling to survive, amidst the harshest economic realities. In a society where people are not insured, they are exposed to financial uncertainties that not only affect them, but their families and communities.
It is a huge break on our common growth, Ladies and Gentlemen.
Thus, we must re-assess and eliminate the stifling policies, roadblocks, and complacency in the insurance system, to encourage innovation and provide our people with simple and accessible insurance, not as an option, but as a fundamental right to secure their future. All within a regulatory framework that serves both clients and grows our industry.
