The Federal Government has promised to reverse deductions from the Employees’ Compensation Scheme administered by the Nigeria Social Insurance Trust Fund (NSITF), in a move aimed at calming tensions with the Nigeria Labour Congress (NLC), which has threatened a nationwide strike.
The NLC had accused the government of diverting 40 per cent of workers’ contributions into the Treasury, undermining the fund’s role in protecting employees who suffer injury, illness or death in the workplace. The union demanded an immediate refund and warned that failure to act could trigger industrial action across the country.
In a letter dated 16 August 2025, NSITF Managing Director, Oluwaseun Faleye, confirmed that deductions had been made but denied any diversion of funds. He explained that the withdrawals followed a Ministry of Finance directive, introduced in December 2023, requiring state-owned enterprises to remit half their internally generated revenue.
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Faleye stressed that employer contributions – which finance the Employees’ Compensation Scheme – are no longer affected following a March 2024 order from the Accountant-General. Some of the previously deducted sums have already been refunded, he added, and further commitments have been secured from the Finance Ministry and the Budget Office to halt all future deductions.
“We have been assured that this matter will be addressed. Both the Minister of Finance and the Director-General of the Budget Office have committed that no further deductions will be made from contributions or investment proceeds,” the NSITF said.
The NLC welcomed the assurance but said its executive council would review the letter before deciding whether to suspend the proposed strike. “The contributions to NSITF are not government revenue. They are meant to safeguard workers and should not be touched,” Assistant General Secretary Christopher Onyeka said.
The union has also raised wider concerns, including the government’s failure to reconstitute the Governing Board of the National Pension Commission (PenCom), which it argues leaves pension funds vulnerable to political interference.
The Employees’ Compensation Scheme is a statutory social insurance programme, funded entirely by employers, that provides financial support to staff who suffer work-related injuries, disabilities or death.
The deductions dispute began after the Finance Ministry classified NSITF among revenue-generating agencies. Critics argue this was inappropriate, given the agency’s tripartite ownership by government, workers and employers.
