Pension operators are working on plans to introduce the informal sector to the Contributory Pension Scheme which is a highly untapped market in the Nigerian environment despite the fact that the informal economy is a large part of the overall economy of the largest economy in Africa..
National Pension Commission recently informed the public that it had commenced a nationwide dialogue with self-employed persons as well as workers in the informal sector ahead of the commencement of the micro pension scheme in the country.
It explained that micro pension is a financial programme for the provision of pension services to self-employed persons and the informal sector workers.
The programme, it noted, had been successful in India, Kenya, Ghana and other countries expected to commence in the country before the end of this year.
The Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, said the Federal Government planned to bring the over 50 million workers in the informal sector into the CPS using the micro pension initiative.
She said this in Lagos while addressing participants at a one-day workshop on the CPS for self-employed tailors and garment workers.
She said government hoped to bring at least 20 million informal sector workers and self-employed persons into the scheme in the next four years and promised that necessary arrangements were being put in place to ensure a smooth start of the scheme later this year.
“Take care of your financial needs in old age now that you are working, not later. Whatever you gain here, please share with your colleagues at the branches and local units,” Mrs. Anohu-amazu stressed.
Head, Research and Corporate Strategy Department at PenCom, Dr. Farouk Aminu, who presented a paper entitled, ‘Contributory Pension for Self-employed Tailors and Garment Workers,’ reviewed the features of the contributory pension scheme (CPS) and the Pension Reform Act, 2014 with emphasis on coverage, access to retirement benefits under the scheme and the Pension Protection Fund.
The commission, he said, understood that the peculiarities of the informal sector such as absence of formal structures, low and irregular income earned by workers except those on fixed salaries, highly mobile and flexible jobs, and lack of permanent work address in many cases.
He said PenCom would be ready to ease the stress associated with the registration and participation for the target workers.
Farouk said the above peculiarities required special registration and customer service platforms even as the commission was anticipating erratic contributions, remittance and withdrawal arrangements.
For the larger economy, the involvement of the informal sector will go a long way in expanding the Nigerian economy and ensure inclusiveness in the management of the economy. With this, the contribution of this sector will add up to the gross domestic product (GDP) of Nigeria with a view at sustaining the country at the number one economy in the continent and work towards making the country one of the elading economies by Year 2020, which is just five years away.
The fact that the country has the largest market in the continent is also a trait that should be tapped into for the economy of the country to be better and carry along the informal sector which have the population that can change any game.