The Role of Actuarial Science in Designing Nigeria’s National Social Protection Financing Framework

This study examines how actuarial science can contribute to the design and financial sustainability assessment of Nigeria's national social protection financing framework, drawing on actuarial contingency modelling, demographic projection, and risk pooling theory. Social protection programs including cash transfers, social health insurance, and social pension schemes are central pillars of Nigeria's National Social Protection Policy, but their long-run financing requirements have not been rigorously estimated using actuarial methods. This study uses a program cost modelling approach applied to Nigeria's three largest social protection programs: the National Social Safety Nets Programme, the NHIA formal sector scheme, and the NSITF Worker Compensation Programme. Actuarial projection models incorporating demographic change, utilization trends, benefit indexation, and alternative revenue scenarios are developed for each program using administrative data for 2018 to 2023 supplemented by World Bank social protection expenditure benchmarks. Long-run financing requirement projections to 2040 under three policy scenarios are produced. Findings reveal that Nigeria's combined social protection expenditure under current program parameters will need to grow from approximately 1.2 percent to 3.5 percent of GDP by 2040 to maintain real benefit adequacy under a moderate demographic growth scenario. Non-oil revenue mobilization must grow substantially to close this financing gap without deficit pressure. The study concludes that actuarial financing frameworks are essential for sustainable social protection policy development in Nigeria. It recommends institutionalizing actuarial review within the Ministry of Budget and National Planning for all social protection programs.

Keywords: social protection, actuarial financing, Nigeria, demographic projection, contingency modelling.