The Federation of Informal Workers of Nigeria (FIWON) has warned that the use of Point-of-Sale (PoS) agents to collect micro pension contributions may not significantly boost participation among informal workers.
The group said the proposal, announced by the National Pension Commission (PenCom), fails to address fundamental challenges such as low awareness, weak incentives, and the rising cost of living. FIWON made this position known on Sunday in Lagos during an interview with the News Agency of Nigeria (NAN).
Speaking in the interview, FIWON’s General Secretary, Gbenga Komolafe, stated that while PoS terminals could make contribution payments more convenient, they would not necessarily encourage long-term savings. He noted that many traders, artisans, and self-employed workers remain reluctant to save because inflation continues to erode the value of their money.
Komolafe said Nigeria’s inflation rate has averaged about 25 per cent over the past five years, making long-term pension savings unattractive.
“Many informal workers see their savings lose value over time. Without inflation protection, it is difficult to convince them to lock away funds,” he said.
He argued that the Micro Pension Plan would be more effective if the government matched workers’ contributions, thereby protecting savings and incentivising participation.
“If a trader saves N1,000 and the government complements it, inflation’s impact becomes less severe, and contributors are assured of real value,” he said.
The FIWON leader also cited a survey conducted by the union with support from Women in Informal Employment: Globalising and Organising (WIEGO), the International Labour Organisation (ILO), and the International Trade Union Confederation (ITUC), which found that participation in micro pensions remains low.
“The survey shows that many workers treat micro pensions as short-term savings for school fees or business expansion, not for retirement,” Mr. Komolafe said.
He maintained that government support would not impose a heavy fiscal burden, estimating that matching contributions would require only about 0.7 per cent of the national budget on average. He added that incentives similar to those in the formal sector, such as employer contributions and payroll deductions, should be adapted for informal workers.
“Even in the formal sector, participation is driven by employer contributions. Similar incentives are needed for informal workers,” he said.
Komolafe also urged the government to introduce a social pension for elderly informal workers who are already beyond retirement age.
“We must not forget those too old to start saving. A basic social pension would provide dignity and security,” he said.
He commended the Abia State Government for its plan to provide stipends and free healthcare to senior citizens, describing the initiative as “a step in the right direction towards expanding social protection coverage.”
Komolafe concluded by calling on the government to strengthen public awareness, introduce targeted incentives, and expand financial support to improve pension inclusion among informal workers in Nigeria.
