MAN, NACCIMA, NECA, NASME, NASSI reject 3% pension hike

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By Victor Ahiuma-Young

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The Organized Private Sector of Nigeria, OPSN, has rejected the Federal Government’s proposed increase in mandatory pension contributions, warning that the move could trigger job losses, business closures, slower wage growth and higher inflation across the country.

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The umbrella body, comprising the Manufacturers Association of Nigeria (MAN), the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), the Nigeria Employers’ Consultative Association (NECA), the Nigerian Association of Small and Medium Enterprises (NASME), the Nigerian Association of Small Scale Industrialists (NASSI) and 25 sectoral employer associations, described the proposal as a “Greek gift” to Nigerian workers, arguing that while it appears beneficial on the surface, it could ultimately hurt businesses, workers and the wider economy.

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Recall that the proposed 3% additional employer pension contribution was announced on Tuesday, July 21, 2026, by the Director-General of the National Pension Commission, PenCom, Ms. Omolola Oloworaran, during the Commission’s Second Quarter 2026 Press Briefing held at the State House in Abuja.

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PenCom’s proposal

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At the briefing, she disclosed that PenCom was proposing amendments to the Pension Reform Act, PRA, 2014, including an increase in the statutory pension contribution rate and an additional mandatory contribution by employers.

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Speaking on behalf of the OPSN in Lagos, Director-General of NECA, Mr. Adewale-Smatt Oyerinde, faulted the timing and process of the proposed pension review.

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“The OPSN supports efforts aimed at strengthening Nigeria’s pension system and improving retirement outcomes for workers. However, announcing that contribution rates will increase while consultations are still ongoing risks prejudging the outcome of the process and reducing subsequent stakeholder engagements to a mere formality.”

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He noted that previous adjustments to pension contribution rates were preceded by extensive consultations among government, employers, organised labour and other stakeholders, insisting that any review must be backed by credible actuarial, economic and employment-impact assessments.

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“Retirement security should not be pursued in a manner that threatens the businesses and jobs upon which the pension system itself depends,” Oyerinde said.

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The OPSN maintained that Nigeria’s existing mandatory pension contribution rate of 18 per cent—comprising 10 per cent from employers and eight per cent from employees—is already comparable to the Organisation for Economic Co-operation and Development (OECD) average of 18.8 per cent, arguing that there is no compelling evidence to justify an increase.

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Also expressing concern, Director-General of MAN, Mr. Segun Ajayi-Kadir, warned that manufacturers are already struggling under the weight of high energy costs, elevated interest rates, exchange-rate volatility, multiple taxes and weak consumer demand.

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He said: “Businesses are already contending with high energy costs, elevated interest rates, exchange-rate volatility, multiple regulatory obligations, weak consumer demand and rising production expenses.

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“Imposing an additional statutory payroll cost without a comprehensive impact assessment will place further pressure on already struggling enterprises.”

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According to him, higher labour costs could force employers to slow recruitment, delay salary reviews, reduce staff strength, increase outsourcing, suspend expansion plans or transfer the additional costs to consumers through higher prices.

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Ajayi-Kadir said: “The proposed increase may directly raise the existing employee contribution, but its wider consequences could still be borne by workers through weaker wage growth, reduced employment opportunities, job losses and higher prices of goods and services.”

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NACCIMA

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Similarly, Director-General of NACCIMA, Mr. Sola Obadimu, warned that imposing another statutory financial obligation on businesses at a time of economic recovery could undermine the gains of ongoing government reforms.

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He stressed that government policies should be evaluated based on their cumulative impact on employment, investment, business survival and competitiveness rather than retirement benefits alone.

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On the impact on small businesses, Director-General of NASSI, Engr. Ifeanyi Oputa, cautioned that micro, small and medium-sized enterprises (MSMEs), many of which operate on thin margins, could be pushed further into informality.

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He said “An additional statutory burden could threaten their survival and discourage them from employing workers formally. A policy intended to strengthen the pension system must not produce the opposite result by shrinking the number of formal employers and contributors.”

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The OPSN urged the Federal Government and the National Pension Commission, PenCom, to suspend the proposed increase pending a comprehensive economic and employment-impact assessment and broader consultations with employers, labour unions and other critical stakeholders.

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The group further called on government to prioritise inflation control, business sustainability and job creation, insisting that a strong pension system can only be built on thriving businesses and a growing formal workforce, not on policies that increase the cost of employment during a period of economic hardship.

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