Only 245,315 workers in Nigeria’s informal sector have enrolled in the Personal Pension Plan (PPP), representing just 0.3 percent of an estimated 84.9 million informal workers, highlighting a significant gap in retirement savings coverage despite the sector’s substantial contribution to the economy.
Data presented by the National Pension Commission (PenCom) at its 2026 Annual Media Conference showed that the vast majority of informal workers remain outside the pension system as of August 2026.
The figures, based on National Bureau of Statistics (NBS) estimates for the second quarter of 2024, indicate that approximately 84.92 million informal workers have no pension coverage, raising concerns about their financial security in retirement.
The informal sector contributes an estimated 58 to 65 percent of Nigeria’s gross domestic product (GDP), while women are particularly exposed to the coverage gap, with 96 percent of employed women working in the informal sector, according to the presentation.
The low enrolment rate underscores the challenge facing PenCom as it seeks to extend retirement savings protection beyond the formal workforce to traders, artisans, farmers, transport workers and other self-employed Nigerians whose earnings are often irregular.
Read also: PenCom pays N8.7bn arrears as NSITF pensioners get 1,173% increase
Speaking at the conference on Tuesday in Abuja, Omolola Oloworaran, director-general of PenCom, said the commission was expanding pension access through a national distribution framework designed to take the Personal Pension Plan directly to informal workers.
“Our accredited pension agents are taking personal pension plans into the markets, motor parks, workshops, to the trader, to the artisan, to the farmer, to the transport worker, to every corner in this country.
“Every agent we accredit is a new livelihood. Every Nigerian, their role is a future secured. We are widening coverage and creating jobs at the same time,” Oloworaran said.
However, PenCom’s presentation identified affordability, irregular income, preference for liquid savings, limited financial awareness, digital-literacy barriers and weak trust in long-term financial institutions as major obstacles to expanding coverage.
For many informal workers, pension contributions compete with immediate household expenses and the daily operating costs of their businesses. The presentation noted that workers often prefer savings they can access quickly rather than funds committed for retirement over several decades.
Limited awareness of pension products and difficulties accessing pension institutions also discourage participation, while weak incentives for continued contributions can cause registered accounts to become inactive.
PenCom stressed that enrolment figures alone should not be treated as evidence of meaningful retirement protection, arguing that pension coverage must be assessed by whether workers contribute consistently and accumulate sufficient savings.
“Each stage can fail independently. A registered account that never receives a second contribution adds nothing to retirement security,” the DG stated.
The commission said progress should therefore be measured through active contributions, frequency of payments, persistence over time, average account balances and the adequacy of retirement benefits.
To address the barriers, PenCom proposed targeted financial education in local languages, engagement with community and market leaders, and greater use of radio and social media to improve awareness of the Personal Pension Plan.
It also recommended simplified digital enrolment through mobile applications, USSD services and online portals, alongside reduced documentation requirements involving phone numbers and National Identification Numbers.
The commission further proposed pension products that accommodate seasonal and irregular earnings, greater awareness of Sharia-compliant options and partnerships with government agencies, non-governmental organisations and development partners.
Oloworaran said the commission’s broader pension reform agenda was intended to make retirement security more accessible while strengthening the system’s capacity to protect contributors.
“The work is not finished. Coverage must widen. Compliance must deepen. Benefits must grow more adequately,” she said.
PenCom’s latest figures highlight the scale of the challenge facing Nigeria’s pension industry: extending access to millions of workers whose livelihoods sustain a substantial share of economic activity but who remain largely excluded from formal retirement savings.
Closing the gap will require more than opening pension accounts. Sustained contributions, products suited to irregular earnings and stronger public confidence will be essential to ensuring that informal workers can build adequate savings for old age.
Related News
