By Michael Oche
The Organised Private Sector of Nigeria (OPSN) has urged the Federal Government to reconsider the proposed increase in mandatory pension contributions, warning that the move could raise the cost of doing business, discourage employment and undermine the country’s fragile economic recovery.
The umbrella body for major employer organisations argued that while improving workers’ retirement security is important, increasing statutory pension deductions at a time of rising inflation and mounting business costs would place additional pressure on employers and employees alike.
In a statement issued by its member organisations, the OPSN described the proposal by the National Pension Commission (PenCom) as a “Greek gift,” saying the anticipated long-term benefits could be outweighed by immediate economic consequences, including job losses and weaker business growth.
The group comprises the Manufacturers Association of Nigeria (MAN), Nigeria Employers’ Consultative Association (NECA), National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), NASME, NASSI and other employer associations.
It maintained that Nigeria’s current mandatory pension contribution rate of 18 per cent already compares favourably with global standards and should not be reviewed upward without compelling actuarial and economic evidence tailored to the country’s realities.
The OPSN urged the Federal Government to focus on curbing inflation, preserving workers’ purchasing power, sustaining businesses and protecting jobs before introducing additional statutory employment costs.
It also called for transparent social dialogue involving government, employers and organised labour, insisting that any future review should follow credible economic and employment-impact assessments.
The Director-General of NECA, Mr Adewale-Smatt Oyerinde, said announcing a contribution increase before concluding stakeholder consultations undermined confidence in the ongoing engagement process.
“The OPSN supports efforts aimed at strengthening Nigeria’s pension system and improving retirement outcomes for workers,” Oyerinde said.
“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,” he said.
He said any adjustment should emerge from genuine dialogue backed by credible actuarial, economic and employment-impact assessments, adding that retirement security should not come at the expense of businesses and jobs.
The Director-General of MAN, Mr Segun Ajayi-Kadir, said manufacturers were already facing mounting production costs, energy expenses, exchange-rate volatility and weak consumer demand.
“Imposing an additional statutory payroll cost without a comprehensive impact assessment will place further pressure on already struggling enterprises,” Ajayi-Kadir said.
He said the proposal could slow recruitment, delay wage reviews, increase outsourcing, reduce employment and raise prices of goods and services.
The Director-General of NACCIMA, Mr Sola Obadimu, warned that imposing fresh financial obligations on employers could undermine ongoing government reforms aimed at improving business competitiveness.
“At a time when businesses are struggling to recover from prolonged economic pressures, imposing another statutory financial obligation on employers could undermine the benefits of those reforms,” Obadimu said.
The Director-General of NASSI, Engr. Ifeanyi Oputa, said higher mandatory pension contributions would hit MSMEs hardest because many already operated under severe financial constraints.
“An additional statutory burden could threaten their survival, discourage formal employment and push more businesses into informality, contrary to the objectives of the pension system,” Oputa said.
The OPSN reiterated its support for reforms that strengthen retirement security but insisted such measures must balance workers’ future benefits with prevailing economic realities facing employers and employees.
It maintained that a strong pension system could only be sustained by thriving businesses, expanding formal employment and a stable economy, not by increasing employment costs.
