The National Pension Commission (PenCom) has launched a new initiative to expand pension coverage to every working Nigerian, seeking access to research and data from Enhancing Financial Access in Nigeria (EFInA) to deepen financial inclusion.
The commission revealed that approximately nine in 10 Nigerian adults currently remain outside formal pension arrangements. This massive gap highlights the difficulty of integrating the country’s vast informal workforce into the Contributory Pension Scheme (CPS).
While there has been a marginal increase in participation, the figures remain low. PenCom reported that pension participation rose from 7.8 per cent in 2023 to 9.1 per cent in 2026. Despite this upward trend, the vast majority of the working population still lacks a structured retirement safety net.
Strategies for bridging the pension gap
To address this shortfall, PenCom intends to leverage EFInA’s data to better understand the barriers preventing Nigerians from accessing pension services. EFInA is a non-profit organisation that provides critical insights into the financial landscape, specifically regarding how underserved populations interact with financial institutions.
By utilising this data, the commission aims to design more effective strategies to reach the unbanked and those operating within the informal economy, such as traders, artisans, and small-scale farmers. Current pension structures have historically focused on formal sector employees, leaving a significant portion of the labour force vulnerable to poverty in their later years.
The push for inclusion comes at a time when the Nigerian government is facing increasing pressure to strengthen social security frameworks. A low pension penetration rate means that the state may eventually face a higher burden of social welfare costs as the population ages without private savings.
Industry observers note that expanding the pension net requires more than just data; it necessitates products that cater to the irregular income streams typical of informal workers. PenCom’s reliance on EFInA suggests a shift toward more evidence-based policymaking to ensure that pension products are both accessible and relevant to the average Nigerian worker.
The commission’s ability to translate these data-driven insights into actionable regulatory frameworks will determine if the current 9.1 per cent participation rate can achieve a meaningful breakthrough in the coming years.
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