Very low indeed

For most part, we have always restricted our discussions on pensions to the formal sector. This is wrong.

As a matter of fact, it is much more so when we realise the huge gap between those in the informal and formal sectors.

This is why the disclosure by the Director-General of the Nigeria Pension Commission (PenCom), Omolola Oloworaran, to the effect that 75 million Nigerians have nothing to fall back on after retirement should worry us.

Oloworaran said in Abuja at the official licensing of Awabah as Nigeria’s first accredited pension agent, that “More than 75 million Nigerians power this economy every day, yet they retire with nothing: no savings, no pension, no safety net. Old age should bring peace, not fear.”

But why would people who have nothing to fall back on when they can no longer work not be afraid? Even those who get pension after retirement are complaining that it is too small to meet their obligations. Yet, these were people who had diligently worked in their prime, only to be abandoned to their own device at a time they can no longer work.

It is against this background that we commend the idea of encouraging these millions of Nigerians to join the pension scheme. Pension should be embraced by all: traders, artisans, farmers, transport operators and small business owners, etc.

It is disheartening that only about 0.25 percent of people in the informal sector in the country are presently covered by pension. This, as the PenCom boss observed is “effectively zero”.

What this tells us is that the majority of Nigeria’s workforce lacks access to structured employment. So, very often, there is nothing like stable wages, benefits, and job security for them.

The truth is; no worker would willingly oblige to his salary or wages being deducted monthly for some uncertain future when the take-home pay cannot even take him home today.

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But then governments put in place structures, often with incentives, to encourage workers in the formal sector to keep something away for their old age. Over the years, the otherwise little drops of water eventually turn to the mighty ocean when it is time to retire.

We welcome PenCom’s decision to close the gap between the formal and informal sectors of the pension contributors. Of particular note is its target of up to 10 per cent coverage this year. This may look small but yet significant. The road to that is not necessarily going to be easy.

Those involved have to be persuaded of the benefits that they stand to gain by participating. They need to be assured and reassured that their savings would be safe and available to them when they retire.

We can see that PenCom is already embarking on publicity blitz in many public places, including buses, etc. to make pension all-inclusive. The commission must sustain this. There is no doubt that, with effective supervision, technology to leverage on by the service banks, telecoms operators and fintech firms to be engaged for the task, the 10 per cent coverage target for the year would be met, and probably surpassed.