Pension Crisis Looms: Millions of Informal Workers Face Uncertain Future

By Adesakin Adefemi

The Director-General of the National Pension Commission, Omolola Oloworaran, has sounded the alarm on the impending pension crisis facing millions of Nigerians working in the informal sector.

Over 75 million workers are likely to retire without any form of pension or retirement savings, leaving them vulnerable to poverty and hardship.

Oloworaran stated this at the presentation of a licensed accredited pension agent certificate to Awabah, the first company to be accredited under PenCom’s new pension agent framework. The move is aimed at bridging the pension gap and encouraging informal workers to save for their retirement.

According to her, Nigeria’s pension reforms have largely benefited workers in the formal sector, leaving the vast majority of informal workers outside the pension safety net.

Citing data from the National Bureau of Statistics, Oloworaran said over 90% of Nigeria’s workforce operates in the informal economy, yet pension coverage among this group remains at about 0.25%.

This means that millions of market traders, artisans, farmers, transport operators, technicians, and small business owners retire without savings, pensions, or any form of social protection. The implications are dire, with widespread old-age poverty posing a significant social and economic risk to the country.

Oloworaran emphasized that extending pension coverage to the informal sector has become the next critical phase of pension reform. To address the gap, PenCom introduced regulations establishing accredited pension agents and rebranded the micro-pension plan as the personal pension plan to encourage wider participation.

The agents are expected to drive pension inclusion by operating within communities and workplaces across the country, with technology playing a key role in expanding coverage. Through digital platforms, informal workers can make small, flexible contributions and access their accounts in real-time, with pension contributions being tax-deductible.

This initiative is a step in the right direction, but more needs to be done to address the pension crisis facing millions of Nigerians. As the country grapples with economic challenges, it’s imperative that policymakers prioritize pension reform and ensure that all workers, regardless of their employment status, have access to a secure retirement.

The accreditation of Awabah as a pension agent is a significant milestone, and it’s expected to create employment opportunities for thousands of agents who will be trained and deployed nationwide to support pension enrollment and education.

As Nigeria navigates its pension landscape, it’s crucial that stakeholders work together to ensure that no worker is left behind. The alternative is unacceptable – a country where millions of citizens are forced to live in poverty in their golden years.