More than 75 million Nigerians working in the informal sector are likely to retire with no pension or retirement savings, the Director-General of the National Pension Commission (PenCom), Omolola Oloworaran, has said.
Oloworaran made this known on Monday in Abuja while presenting a licensed accredited pension agent certificate to Awabah, the first company accredited under PenCom’s new pension agent framework.
She explained that Nigeria’s pension reforms have mainly benefited workers in the formal sector, leaving most informal workers outside the pension system.
Citing the National Bureau of Statistics, Oloworaran said over 90 per cent of Nigeria’s workforce is in the informal economy, yet only about 0.25 per cent of them have pension coverage.
“This means millions of market traders, artisans, farmers, transport operators, technicians and small business owners retire without savings, pensions, or any social protection,” she said.
She added, “According to the National Bureau of Statistics, over 90 per cent of Nigeria’s workforce operates in the informal sector. This includes more than 75 million Nigerians—market traders, artisans, farmers, technicians, transport operators, small business owners and young entrepreneurs—who power the economy every day.
Yet, as of today, pension coverage for this group stands at just 0.25 per cent. In practical terms, we can round that down to zero. Most of these workers retire with nothing—no savings, no pensions and no safety net.
After decades of hard work, old age should bring peace, not fear. This gap is not only a social challenge; it is a national vulnerability. A country cannot be strong when millions slide into poverty, and an economy cannot be resilient when households lack protection.”
Oloworaran recalled that the 2004 Pension Reform Act transformed Nigeria’s pension system by introducing a contributory structure, replacing unfunded promises with regulated savings.
“Before 2004, pensions were promises without funding, retirees queued endlessly, families suffered indignity, and old age became synonymous with hardship. That reform replaced uncertainty with structure, promises with savings and politics with discipline,” she said.
She noted that pension assets have since grown to over ₦27 trillion, with more than 10 million retirement savings accounts. “Nigeria operates one of the strongest pension systems in Africa and, I daresay, globally. The evidence is clear: reform works. But that reform secured mainly the formal worker, and Nigeria is not a formal economy. That leaves a gap that we must close.”
The PenCom DG stressed that expanding pension coverage to the informal sector is now the critical phase of reform. She warned that widespread old-age poverty is both a social and economic risk.
To close this gap, PenCom introduced regulations to establish accredited pension agents and rebranded the micro-pension plan as the personal pension plan to encourage more people to participate.
Oloworaran said the agents will promote pension inclusion by working in communities and workplaces nationwide. She added that technology will make it easier for informal workers to make small, flexible contributions and access their accounts instantly.
She also noted that pension contributions are tax-deductible and that partnerships with payment banks, telecoms, and fintech firms would boost participation.
“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, in real time and seamlessly—through digital onboarding, micro-daily or weekly contributions, real-time account access, seamless benefit payments and low-cost servicing at massive scale,” Oloworaran said.
She added, “Government policy must support those who choose to save. Pension contributions are tax-deductible, so Nigerians who save can keep more of what they earn. This is where payment banks, telecoms, and fintechs like Awabah become transformative.”
Describing Awabah’s accreditation as a milestone, she said it marks the start of a new phase in pension distribution, especially for informal sector workers. The initiative will also create jobs, with thousands of agents expected to be trained and deployed across the country.
Speaking at the event, Awabah CEO Tunji Andrews said the company was created to fill the gap in financial protection for informal workers.
“When we started Awabah, we were driven by a single idea: that no African worker should be one mishap away from poverty. We saw skilled artisans, tireless traders and vibrant creators who drive our economy every day, but their protection was nearly non-existent,” he said.
Andrews said Awabah’s accreditation is part of a broader effort to improve financial security for informal workers. He added, “What we are launching today is a nationwide rollout of an accredited agent network designed to formalise the workforce’s financial security.”
He also noted that Awabah’s pension plan combines retirement savings with insurance coverage. “Through our ValuBah bundle, we have shown that for as little as ₦3,000 a month, workers can access personal pensions bundled with health insurance, accident cover and life insurance,” Andrews said.
