The Nigeria Labour Force Survey, published by the National Bureau of Statistics (NBS), has revealed that only 26.3% of Nigerian workers had access to a pension plan and health insurance in 2023. The report highlighted significant regional disparities, with Zamfara state recording the highest percentage of workers with both pension and health insurance coverage at 65.9%, while Abia state had the lowest at just 3.9%.
According to the NBS, the low coverage of pension and health insurance is largely due to the high number of informal sector workers in the country. Approximately 92% of Nigeria’s employed population works in the informal sector, where businesses operate without formal regulations, leading to the absence of social benefits such as pensions and health insurance for both employers and employees.
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The informal sector, which contributed 57.7% to Nigeria’s GDP in 2022 according to the International Monetary Fund (IMF), plays a significant role in the economy. However, millions of Nigerians working in this sector remain excluded from traditional pension systems, leaving them vulnerable to financial insecurity during retirement.
Under the Pension Reform Act, employers with at least 15 employees are required to participate in a contributory pension scheme, with a minimum employer contribution of 10% of an employee’s salary, and employees contributing up to 8%. Similarly, the National Health Insurance Authority Act mandates health insurance for all employees, with employers required to provide either public or private health insurance for workers.
Despite these regulations, the National Health Insurance Agency (NHIA) reports that only 18.7 million people are enrolled in health insurance schemes, a small fraction of the overall population.
The report underscores the need for greater efforts to extend pension and health insurance coverage, particularly for workers in Nigeria’s informal sector.
