•PenCom boss, Omolola Oloworaran
The National Pension Commission (PenCom) has again expressed worry over a large chunk of informal sector workers missing out of the Contributory Pension Scheme (CPS) saying that it is worried about life at retirement without proper planning which the scheme has offered.
According to Omolola Oloworaran, the Commission’s Director General and Chief Executive Officer, more than 75 million Nigerians working in the informal sector are likely to retire without any form of pension or retirement savings, reports Daily Independent.
Oloworaran, who spoke 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, noted that 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 Director General said over 90 per cent 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.
“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.” She said citing the statistics from the Nigerian Bureau of Statistics.
“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 Director General 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 N27 trillion, with more than 10 million retirement savings accounts.
“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 27 trillion Naira, 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 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.
“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 contribution, real-time account access, seamless benefit payment, and low-cost servicing at a massive scale.
“And government policy must support those who choose to stay. And I should note that pension contributions are tax-deductible, so of course, the government is encouraging Nigerians who save to keep more of what they earn by contributing towards their retirement. This is when PSBs, payment service banks, telcos, and fintechs like Awabah become transformative, ” Oloworaran said.
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 enrollment and education.
Speaking at the event, Tunji Andrews, the Chief Executive Officer of Awabah, 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 adding “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 saying: “Through our ValuBah bundle, we have shown that for as little as N3,000 a month, workers can access personal pensions bundled with health insurance, accident cover, and life insurance,” he said.
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.
