Nigeria’s retirement savings account system has been described as effective and a success story. For a country with no organised pension industry and retirement savings accounts, it has been a positive story.
However, the rate of growth has not been encouraging and in terms of where Nigeria should be based on the potential and Nigeria’s population, the NGN4 trillion pension contribution should have tripled.
First is the fact that Nigeria only has 7.2 million people in the retirement savings account system. As a matter of fact the number only grew by 7.2% year on year when compared to 2015 third quarter when the total membership of the scheme was put at 6.8 million.
According to the Nigerian Bureau of statistics, there are over 30 million Nigerian who work in public and private sectors who meet the criteria of joining the RSA system. The fact that only 7.2 million people are the RSA net shows that the scheme has a long way to go.
The scheme has also been bedevilled by series of malpractices and unethical behaviours on the part of employers in public and private sectors who often default in remitting compulsory retirement savings even after they have been deducted from accounts of their staff.
The Bigger Picture
Another major pointer in the latest data is the gender disparity that still exist in the labour force. With a total of 7.2 million, only 2 million are female while a staggering 5.1 million are males.
This is a damning figure because it points to the fact that many women are still been exempted from many industries and sectors. It is also an indication that women are still traditionally tied to certain jobs, petty trading and agrarian activities that makes them ineligible for the RSA system.
The financial future of women is still very much in doubts as many women still have to depend on men, children and family members once they can no longer work, that is in case they have any job in the first place.
Another angle that resonate in the data is the fact that many young Nigerians under the age of 30 years do not get job early enough. They only number about 718k which is just 10% of the total number.
The country has older people in the RSA system who might need to retire in the next decade or two. The country will need to increase the campaign to get more people into the net.
The more people join the net, the more robust the contributions get. Corporate organisations and government can then borrow these funds to develop infrastructure, capital investments which can further generate more jobs.