Nigeria’s primary private sector coalition has expressed deep concern over proposed increases to mandatory pension contributions, warning the move could threaten employment and business survival.
The Organised Private Sector of Nigeria (OPSN)—which represents major commerce, manufacturing, and employer associations—described the proposal by the National Pension Commission (PenCom) as “premature and counterproductive”.
Under the Pension Reform Act 2014, mandatory pension contributions currently stand at 18% of an employee’s monthly pay, split between a 10% employer contribution and an 8% worker deduction. PenCom has announced plans to review the legislation and raise this rate and to introduce an additional 3% annual levy on total payroll.
While PenCom maintains the changes are necessary to boost workers’ retirement funds, business leaders argue that forcing higher contributions during an economic downturn could backfire.
In a joint statement, the group warned that increasing statutory payroll costs could force struggling firms to halt recruitment, freeze wage increases, cut jobs, or pass additional expenses onto consumers through higher prices.
“The strength of any contributory pension system depends fundamentally on the survival of businesses, the availability of decent jobs, and the capacity of employers and employees to make consistent contributions,” the coalition said.
They urged PenCom and the federal government to pause adjustments until broader macroeconomic stability is achieved, calling for efforts to be focused instead on curbing inflation and preserving workers’ immediate cash flow.
PenCom says consultations with key stakeholders, including trade unions, employers, and lawmakers, remain ongoing before any draft amendments are submitted to the National Assembly.
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