Five years after its launch in 2019, Nigeria’s Micro Pension Plan (MPP) remains underwhelming in its adoption, despite deliberate policy initiatives by the National Pension Commission (PenCom). By June 2024, only 143,565 contributors had registered, with total contributions of ₦860.37 million, reflecting limited uptake compared to the nation’s large informal sector. The scheme targets self-employed individuals and small businesses, offering a flexible savings option to support retirement or emergencies, yet the general perception persists that pensions are mainly for formal sector workers.
The MPP’s flexibility is a key feature, allowing contributors to deposit funds daily, weekly, or monthly, accommodating the informal sector’s variable income patterns. Contributions are divided into two parts: 40% is accessible for short-term needs after three months, while 60% is reserved for retirement and becomes available upon turning 50 or in cases of incapacitation. This structure mirrors practices in other countries like India and Kenya, but in Nigeria, the scheme’s penetration remains slow, hindered by challenges unique to the informal economy.
The plan covers a wide array of professions, from artisans to professionals, and promotes financial inclusion for low-income earners. Despite these advantages, the program’s potential is yet to be fully realized due to limited awareness and skepticism. Stakeholders believe intensified efforts in public education and trust-building could boost enrollment, ensuring broader social protection and old-age security for informal sector workers.