More than 75 million Nigerians working in the informal sector may retire without pensions or savings, according to the National Pension Commission (PenCom). The commission’s Director-General, Omolola Oloworaran, raised the concern on Monday in Abuja, warning that limited pension coverage among informal workers poses a growing social and economic risk to the country.
Oloworaran said data from the National Bureau of Statistics shows that over 90 per cent of Nigeria’s workforce operates in the informal economy, yet pension coverage for this group stands at about 0.25 per cent. She noted that the gap affects market traders, artisans, farmers, transport workers, technicians and small business owners who drive daily economic activity.
“According to the National Bureau of Statistics, over 90 per cent of Nigeria’s workforce operates in the informal sector… Yet, as of today, pension coverage for this group stands at just 0.25 per cent,” she said. “In practical terms, we can round that down to zero. This means that most of these workers retire with nothing—no savings, no pensions and no safety net.”
She recalled that the 2004 Pension Reform Act introduced a contributory pension system that replaced unfunded obligations with regulated savings. Since then, pension assets have grown to over ₦27 trillion, with more than 10 million retirement savings accounts. However, she said the reforms mainly secured formal sector workers, leaving most Nigerians outside the system.
To address the gap, PenCom has introduced accredited pension agents and rebranded the micro-pension plan as the personal pension plan. Oloworaran said the approach relies on community-based agents and digital platforms that allow small, flexible contributions. She added that pension contributions are tax-deductible and supported by partnerships with banks, telecom firms and fintech companies.
At the event, PenCom presented an accreditation certificate to Awabah, the first licensed pension agent under the new framework. Awabah’s Chief Executive Officer, Tunji Andrews, said the company aims to improve financial protection for informal workers. He said its pension product combines retirement savings with insurance, offering coverage from as little as ₦3,000 per month.
