In Lagos, the Managing Director of Arthur Stevens Asset Management, Olatunde Amolegbe, has called on operators in the insurance and pension industries to design strategies that will cover Nigeria’s large informal workforce.
He made the appeal while speaking at the 10th Annual Conference of the Nigerian Association of Insurance and Pension Editors, which discussed ways of strengthening pension and insurance structures to support the economy.
Amolegbe noted that the informal sector accounts for about 70 million Nigerians, yet most of them are excluded from pension and insurance plans. He described both industries as key parts of the financial system with the potential to mobilize long-term funds but said they have struggled for years due to weak public confidence, lack of awareness, and poor trust.
He explained that by 2023, only about 26 percent of Nigerian workers were enrolled in a pension plan or health insurance. This was largely because 92 percent of employed Nigerians work in the informal sector, where adoption of the voluntary micro pension scheme has remained low. Figures show that by December 2024, only 172,936 people had registered for micro pensions six years after the initiative was launched.
On the insurance side, Amolegbe pointed out that Nigeria’s penetration rate is still below one percent, falling behind countries such as South Africa with 11.54 percent, Namibia at 7.41 percent, Morocco at 4.10 percent, Kenya at 2.25 percent, and a global average of 6.8 percent.
To change the situation, he advised that the first step should be to rebuild confidence and trust among workers in the informal sector. According to him, without trust, people will be reluctant to put their money in schemes they fear might not be accessible. He also recommended simpler systems for enrollment, using modern technology to reach more people.
He proposed that pension operators establish micro Pension Fund Administrators in local communities where informal workers live and operate. For the insurance sector, he urged them to take advantage of the publicity around NIIRA 2025 to spread financial literacy among young Nigerians and create a culture of saving through insurance and pensions.
Amolegbe stressed that without bringing the informal sector into the fold, the true potential of insurance and pensions to grow the economy will remain untapped.