The Role of Actuaries in Risk Management for Nigerian State Government Budget Planning

This study examines the role of actuaries in supporting risk-informed budget planning in Nigerian state governments. Actuarial skills in mortality projection, contingent liability estimation, and stochastic scenario modelling have direct applications in public finance, particularly in areas such as pension liability budgeting, disaster risk provisioning, and social program cost estimation. However, actuarial engagement in Nigerian state budget processes is minimal compared to best practice in other jurisdictions. This study adopts a qualitative research design, conducting in-depth interviews with 28 actuaries, state finance commissioners, and budget planning officers in Oyo, Enugu, and Plateau States, supplemented by document analysis of state budget framework papers. The current scope of actuarial input in state budgeting, barriers to wider engagement, and international best practice comparisons are assessed. Findings reveal that actuarial contributions to state budget planning are limited primarily to pension liability estimates, with negligible involvement in healthcare cost projection, natural disaster contingency reserve design, or social safety net costing. Barriers include limited awareness of actuarial value among budget planners and a shortage of actuaries willing to engage in public sector roles. The study concludes that expanding actuarial involvement in state government budget planning could materially improve fiscal planning quality in Nigeria. It recommends that the Institute and Faculty of Actuaries Nigeria establish a public sector actuarial engagement program to place actuarial fellows in state budget planning offices.

Keywords: actuarial science, public sector, state budget planning, fiscal risk, pension liability.