More than 75 million Nigerians working in the informal sector face the prospect of retiring without pensions or any form of retirement savings, raising concerns over looming old-age poverty and economic vulnerability, the Director-General of the National Pension Commission (PenCom), Mrs Omolola Oloworaran, has warned.
Oloworaran spoke on Monday in Abuja at the presentation of a licensed pension agent certificate to Awabah, the first firm accredited under PenCom’s newly introduced pension agent framework aimed at deepening pension inclusion among informal workers.
Citing data from the National Bureau of Statistics (NBS), the PenCom chief disclosed that over 90 per cent of Nigeria’s workforce operates within the informal economy, yet pension coverage for the segment remains as low as 0.25 per cent.
“In practical terms, we can round this down to zero,” Oloworaran said. “This means that millions of market traders, artisans, farmers, technicians, transport operators, small business owners and young entrepreneurs retire with nothing—no pensions, no savings, and no social protection.”
She warned that the situation poses a serious social and economic risk, noting that widespread old-age poverty undermines national resilience and economic stability.
“After decades of hard work, old age should bring peace, not fear. A country cannot be strong when millions slide into poverty at retirement, and an economy cannot be resilient when households lack protection,” she added.
Reflecting on Nigeria’s pension journey, Oloworaran recalled that the Pension Reform Act of 2004 fundamentally transformed the country’s retirement system by replacing unfunded pension promises with a contributory and regulated savings framework.
“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, and promises with savings,” she said.
According to her, pension assets have since grown to over ₦27 trillion, supported by more than 10 million Retirement Savings Accounts (RSAs), positioning Nigeria as one of Africa’s strongest pension systems.
“Reform works. But it secured mainly the formal worker, and Nigeria is not a formal economy. That gap is the next frontier we must close,” she stated.
Oloworaran said PenCom is now prioritising the informal sector through regulatory reforms, including the introduction of accredited pension agents and the rebranding of the micro-pension scheme as the Personal Pension Plan to encourage broader participation.
She explained that technology would be central to expanding coverage, enabling informal workers to make small, flexible contributions through digital platforms and access their accounts in real time. Pension contributions, she added, are tax-deductible.
“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,” she said, adding that partnerships with payment service banks, telecommunications firms and fintech companies would accelerate inclusion.
Describing Awabah’s accreditation as a milestone, the PenCom DG said the firm’s entry marks a new phase in pension distribution and is expected to drive grassroots pension enrollment while creating thousands of jobs through a nationwide agent network.
Speaking at the event, Awabah Chief Executive Officer, Tunji Andrews, said the company was established to address the lack of financial protection among informal workers.
“When we started Awabah, we were driven by a simple belief—that no African worker should be one mishap away from poverty,” Andrews said. “We saw vibrant traders, skilled artisans and creators powering the economy, but with little or no protection.”
He said Awabah’s agent network would support pension education and enrollment nationwide, adding that the firm’s pension products combine retirement savings with insurance coverage.
“Through our ValuBah bundle, workers can contribute as little as ₦3,000 monthly and access personal pensions alongside health, accident and life insurance,” Andrews said.
Nigeria’s pension reforms have significantly secured formal sector workers since 2004. However, with over 90 per cent of the workforce operating informally, experts warn that closing the pension inclusion gap remains critical to preventing widespread old-age poverty.
