84.9m Informal Workers Without Pension Despite Contributing 61% to GDP — PenCom

About 84.9 million workers in Nigeria’s informal sector have no pension coverage despite contributing between 58 and 61 per cent to the country’s Gross Domestic Product, the National Pension Commission (PenCom) has said.

Head of Micro Pension Department at PenCom, Babatunde Alayande, disclosed this in Lagos on Tuesday, saying the sector accounts for about 93 per cent of Nigeria’s workforce, estimated at 85 million people, majority of whom are women.

Alayande said as of July 26, 2026, only about 263,000 informal sector workers had been registered under the Personal Pension Plan (PPP), representing just 0.3 per cent coverage.

Speaking on ‘Why a Personal Pension Plan, eligibility criteria, benefits, features and inclusion strategies for the informal sector’ he said, “the PPP was introduced after the micro-pension guidelines were replaced in October 2025, pursuant to Section 2(3) of the Pension Reform Act 2014, which provides that self-employed persons and workers in organisations with less than three employees should have access to pension.”

Alayande said the plan was designed for the peculiarities of the informal sector where employment is not based on formal contract and income is low, irregular and scattered.

“The way a vulcanizer operates in GRA will be different from how one operates in Maryland. Today they have business, tomorrow they may relocate to the village. That is the nature of work,” he said.

He said less than 10 per cent of informal workers are covered by any form of social security programme.

Under the PPP, he explained, documentation has been reduced to only phone number and National Identification Number (NIN), while contribution is flexible, daily, weekly, monthly or seasonally to accommodate farmers who are more buoyant during harvest.

The Retirement Savings Account under the plan is split into two, 40 per cent contingent portion which can be withdrawn for emergencies, and 60 per cent preserved for retirement. Contributors can retire from age 50 and take their benefits as lump sum or programmed withdrawal.

Alayande listed low and irregular income, limited awareness, trust deficit and preference for immediate cash as major challenges facing uptake.

To bridge the gap, he said PenCom has licensed corporate entities and FinTechs, including eTranzact and SunTrust, as micro pension agents to drive enrolment in markets and underserved areas.

He said the Commission is also working on tailored products such as gender-sensitive products for women and Shariah-compliant products, sustained awareness in markets, and collaboration with government agencies, NGOs and development partners for incentives.

“We need to ensure those registered fund their accounts and get reminders when they have not funded for two to three months, because only persistent contribution can assure pension adequacy at retirement,” he added.