EFFECTS OF CONTRIBUTORY SCHEMES ON NIGERIAN ECONOMIC GROWTH

Abstract

This study assessed the effect of contributory schemes on Nigerian economic growth.
Nevertheless, poor enrolment of Nigerians to contributory schemes is one of the major
impediments to supporting and sustaining the real sectors of the economy. The following
specific objectives guided the study: to assess the effect of contributory pension scheme
(CPS) on Nigerian economic growth, to ascertain the effect of contributory life insurance
scheme (CLIS) on Nigerian economic growth, to assess the effect of contributory national
housing fund (NHF) on Nigerian economic growth, to evaluate the effect of tertiary
education trust fund (TETFUND) on Nigeria economic growth. Based on the objectives of
the study, four research questions and hypotheses were formulated. Ex-Post facto research
design was adopted. The time series data were for a period of seventeen years spanning
from 2006 to 2022 was obtained from Central Bank of Nigeria, National Bureau of Statistics
and the World Bank Publications, TETFUND Annual Report, Nigerian Insurer’s Digest
from (NAICOM), Federal Mortgage Bank of Nigeria (FMBN) annual reports and Pension
Commission (PENCOM) annual reports. The study employed descriptive statistics and
inferential statistics using Ordinary Least Square (OLS) regression analysis, Specifically,
contributory pension scheme has a significant and positive effect on economic growth of
Nigeria (β1 = 0.891720; p-value = 0.0000 < 0.05); contributory life insurance scheme has
a significant and positive effect on economic growth of Nigeria (β2 = 0.430095; p-value =
0.0003 < 0.05); contributory national housing fund has a significant and positive effect on
economic growth of Nigeria (β3 = 0.238632; p-value = 0.0146 < 0.05); contributory tertiary
education trust fund has a significant and positive effect on economic growth of Nigeria (β4
= 3.699614; p-value = 0.0010 < 0.05). This study therefore concludes that contributory
scheme components exert significant influence on the economic growth of Nigeria at 5%
level of significance. It was recommended that pension fund administrators should continue
to develop the contributory pension scheme in order to develop its financial market to
achieve international standards and attract more investors. Nigerians in employment,
whether self-employed or in paid employment or not, to be integrated and captured under
the NHF Act No.3 of 1992. Life insurance should continuously serve as financial
intermediaries between investors and economic agents that lack sufficient financing:
households, businesses and in some cases even governments. TETEFUND scheme should
be sustained for an improved economic growth as it increases students’ enrolment through
scholarship grants to mainly poor and vulnerable youths.