More than 75m Nigerians face retirement without pensions – PenCom

Not less than 75 million Nigerians working in the informal sector are likely to retire without any form of pension or retirement savings, Omolola Oloworaran, Director-General of the National Pension Commission, has said.

The PenCom DG stated this on Monday in Abuja while speaking at the presentation of a licensed accredited pension agent certificate to Awabah, the first company to be accredited under the commission’s new pension agent framework.

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, the PenCom DG said over 90% of Nigeria’s workforce operates in the informal economy, yet pension coverage among this group remains at about 0.25 per cent.

She said the implication is that millions of market traders, artisans, farmers, transport operators, technicians and small business owners retire without savings, pensions or any form of social protection.

Oloworaran said, “According to the National Bureau of Statistics, over 90% 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%.

“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.

“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.”

The PenCom DG recalled that the 2004 Pension Reform Act transformed Nigeria’s pension system by introducing a contributory structure that replaced unfunded promises with regulated savings.

She noted that pension assets have since grown to over ₦27tn, with more than 10 million retirement savings accounts.

She said, “In 2004, the Pension Reform Act changed the trajectory of retirement security in our country forever. Before then, 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.

“Today, pension assets exceed ₦27tn, with over 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.”

However, she stressed that extending pension coverage to the informal sector has become the next critical phase of pension reform, warning that widespread old-age poverty poses a social and economic risk to the country.

To address the gap, she said PenCom introduced regulations establishing accredited pension agents and rebranded the micro-pension plan as the personal pension plan to encourage wider participation.

She said the agents are expected to drive pension inclusion by operating within communities and workplaces across the country. The PenCom DG added that technology will play a key role in expanding coverage, allowing informal workers to make small, flexible contributions through digital platforms and access their accounts in real time.

She said pension contributions are tax-deductible and noted that partnerships with payment service banks, telecommunications companies and fintech firms would support broader participation.

Oloworaran said, “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.

“And government policy must support those who choose to save. Pension contributions are tax-deductible, so the government is encouraging Nigerians who save to keep more of what they earn by contributing towards their retirement. This is where payment service banks, telecommunications companies and fintechs like Awabah become transformative.”

Describing Awabah’s accreditation as a milestone, she said the firm’s entry as the first licensed pension agent marked the beginning of a new phase in pension distribution, particularly for informal sector workers.

She said the initiative would also create employment opportunities, with thousands of agents expected to be trained and deployed nationwide to support pension enrolment and education.

Speaking at the event, the Chief Executive Officer of Awabah, Tunji Andrews, said the company was founded to address the lack of financial protection among informal workers.

Andrews said, “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 productivity was high while their protection was nearly non-existent.”

He described Awabah’s accreditation as part of a broader effort to improve financial security for informal workers, adding that the company’s agent network would support pension inclusion nationwide. “What we are launching today is a nationwide rollout of an accredited agent network designed to formalise the workforce’s financial security,” he said.

Andrews said Awabah’s pension offering combines retirement savings with insurance coverage to make protection more accessible. He said, “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.”

Nigeria’s pension reform has largely secured formal sector workers since 2004, but over 90 per cent of the workforce in the informal sector remains uncovered. To close this gap, PenCom introduced the personal pension plan and accredited pension agents to expand access to retirement savings for informal workers nationwide.