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Chuks Udo Okonta
A whopping 159.91 million informal sector workers in the country are yet to be convinced by Pension Fund Administrators (PFAs) to embrace the Micro Pension Plan (MPP) at a time only 89,327 of them have been registered as at December 2022 as stated by the National Pension Commission (PenCom).
According to the International Monetary Fund, (IMF) the informal economy employs approximately 5.5 million people in Lagos State alone—roughly three-quarters of the state’s 7.5 million labour force—and in the country as a whole, with nearly 200 million people, over 80 per cent of the population works in the informal sector.
Going by the nation’s population put over 200 million, while 80 per cent of the population – 160 million, work in the informal sector and only 89,327 MPP subscribers registered, 159,91 million are without structured retirement plan.
Given the labour intensity, there is little doubt that the bulk of businesses and entrepreneurs are in the informal sector. Unlike the formal economy, the informal economy’s operations are not included in the country’s Gross Domestic Product (GDP). As a result, the GDP figure computation is a significant underestimate of the country’s GDP when the massive informal economy is excluded.
Meanwhile, the country’s informal sector continues to flourish in various situations and, based on demographic and economic data, may be the biggest in Africa.
Agreeably, across the country, it is easy to notice street traders, artisans, vendors, nano and micro-businesses, commercial buses, tricycles, and motorbikes (Okada riders), domestic workers, market traders, among others, all operating informally.
According to PenCom, of the 89,327 micro pension plan Retirement Savings Account (RSA) holders, ARM Pension Managers (PFA) Limited, registered 22,580; Stanbic IBTC Pension Managers Limited, had 14,962 while Sigma Pensions Limited recorded 55 subscribers.