Nigeria's Pension Commission (PenCom) warned that over 75 million Nigerians currently face retirement without any financial security, as it announced on Monday that it would utilize technology to increase retirement savings for the country's large informal workforce. Speaking in Abuja at Awabah's official licensing as Nigeria's first accredited pension agent, PenCom's Director-General, Omolola Oloworaran, lamented that the informal sector's pension coverage was only 0.25 percent, or "effectively zero," despite the fact that the sector employs more than 90% of the nation's workforce.
Oloworaran stated that PenCom plans to use digital platforms to reach a 10% pension coverage rate in the informal sector by 2026, which would be the next significant stage of pension reform following the historic 2004 Pension Reform Act.
According to her, payment service banks, telecom providers, and fintech companies would be crucial in providing affordable pension services on a large scale, and the tax deduction of pension payments would encourage participation.
“Financial security in old age is not charity, it is justice, it is stability, it is nation building. Now, our mandate is clear. “More than 75 million Nigerians power this economy every day, yet they retire with nothing: no savings, no pension, no safety net. Old age should bring peace, not fear. “If we are serious about reaching over 75 million Nigerians, we cannot rely on manual processes or paper forms. We must meet Nigerians where they already are, on their phones,” she said.
Nigeria's pension system is among the strongest on the continent, with pension assets having grown to over ₦27 trillion, according to the PenCom DG. However, he acknowledged that the reform's success had mostly been limited to workers in the formal sector, excluding those in the informal economy, traders, artisans, farmers, transportation operators, and small business owners.
The PenCom DG cautioned that the informal sector's exclusion posed a macroeconomic danger in addition to being a social failure, characterizing it as a "national vulnerability" that jeopardized long-term economic stability.
"It would be necessary to move pensions out of offices and into everyday life through accredited pension agents, technology, and simplified contribution systems in order to close this gap," she said.
Noting that the company was the first accredited pension agent under the new structure, she called Awabah's licensing a "watershed moment" for pension distribution. In order to achieve wide nationwide coverage, the DG added, PenCom is willing to license as many pension agents as feasible, provided they fulfill infrastructure and regulatory standards.
The Resilience Funding initiative, which will be implemented through an accredited agent network, will enable employees, ranging from security guards to small business owners, to contribute to personal pensions and obtain health, accident, and life insurance for as little as 3,000 Naira per month, according to Tunji Andrews, CEO of Awabah. He went on to say that the program is a component of a larger plan to increase workforce resilience throughout Africa.
