The Federal Government has pledged to reverse deductions from the Employees’ Compensation Scheme managed by the Nigeria Social Insurance Trust Fund, to ease tensions with the Nigeria Labour Congress, following the threat of a nationwide strike by the union.

Last week, the NLC accused the Federal Government of diverting 40 per cent of NSITF contributions to the government’s treasury. The NLC said the move undermined workers’ social protection and demanded both an immediate refund and the full reconstitution of the National Pension Commission board. It warned that non-compliance could trigger industrial action nationwide.

The Employees’ Compensation Scheme is a social insurance programme providing financial support to employees who suffer work-related injuries, illnesses, disabilities, or death. The scheme is funded entirely by employer contributions, typically around one per cent of monthly payroll, with no contributions required from employees.

In a letter to the NLC dated August 16, 2025, NSITF Managing Director Oluwaseun Faleye confirmed that deductions from workers’ compensation contributions had occurred but said they were not a diversion of funds. The letter, received by newsmen was also sent to the Ministers of Labour and Finance, the Director-General of the Budget Office, and the Accountant-General of the Federation.

Faleye said the deductions followed a federal policy introduced in December 2023 requiring all government-owned enterprises to remit half of their internally generated revenue to the treasury. The policy, issued by the Minister of Finance and Coordinating Minister of the Economy Wale Edun, was designed to boost government revenue and narrow a widening fiscal deficit, reflecting a fiscal strategy strongly championed by President Bola Tinubu.

(punch)