Only 245,315 workers in Nigeria’s informal sector have enrolled in the Personal Pension Plan (PPP), representing approximately 0.3 per cent of an estimated 84.9 million informal workers, highlighting a major gap in retirement savings coverage.
Data presented by the National Pension Commission (PenCom) at its 2026 Annual Media Conference showed that the vast majority of informal workers remained outside the pension system as of August 2026.
Based on National Bureau of Statistics estimates for the second quarter of 2024, approximately 84.92 million informal workers lack pension coverage, raising concerns about their financial security in retirement.
The informal sector contributes an estimated 58 to 65 per cent of Nigeria’s gross domestic product (GDP). However, many traders, artisans, farmers, transport operators and self-employed people remain excluded from formal retirement savings arrangements.
Women are particularly exposed to this gap, with PenCom’s presentation indicating that 96 per cent of employed women work in the informal sector.
PenCom Expands Pension Access
Speaking at the conference in Abuja, Omolola Oloworaran, director-general of PenCom, said the commission was expanding access through a national distribution framework designed to bring the Personal Pension Plan closer to informal workers.
She said accredited pension agents were reaching traders, artisans, farmers and transport workers in markets, motor parks and workshops to encourage participation.
The initiative is intended to make pension services more accessible to people who do not benefit from conventional employer-backed pension arrangements.
However, PenCom identified several obstacles to wider adoption, including irregular income, affordability concerns, limited financial awareness, digital literacy barriers and distrust of long-term financial institutions.
For many informal workers, setting money aside for retirement competes with immediate household expenses and the daily costs of running a business. As a result, readily accessible savings may appear more attractive than funds committed to long-term retirement planning.
The commission also warned that registering for a pension account does not necessarily mean a worker is building meaningful retirement savings. Some accounts may remain inactive if contributors fail to make regular payments.
PenCom said the effectiveness of the scheme should therefore be measured by the consistency of contributions, the number of active accounts, accumulated balances and the adequacy of eventual retirement benefits.
Digital Services and Flexible Contributions
To improve participation, PenCom proposed expanding financial education in local languages and working with community leaders, market associations and other groups that already have relationships with informal workers.
The commission also recommended simplified digital registration through mobile applications, USSD services and online portals, alongside reduced documentation requirements involving phone numbers and National Identification Numbers.
It further called for 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.
These measures are intended to make pension contributions more practical for people whose earnings fluctuate from day to day or season to season.
Oloworaran said the commission’s reform efforts were aimed at widening coverage, strengthening compliance and improving retirement benefits.
Nigeria’s low informal-sector pension participation highlights the challenge of extending retirement protection beyond formal employment. Achieving wider coverage will require affordable contribution options, sustained public education and greater confidence in the pension system.
