The Organised Private Sector of Nigeria (OPSN) has opposed the proposed increase in mandatory pension contributions by the National Pension Commission (PenCom), warning that the move could lead to job losses, slower wage growth and higher business costs.
In a statement jointly signed by the umbrella body, which comprises the Manufacturers Association of Nigeria (MAN), the National 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, the group described the proposal as a “Greek gift” to workers.
The OPSN was reacting to PenCom’s proposal to increase mandatory pension contributions and introduce an additional annual contribution equivalent to three per cent of employers’ total wage bill.
According to the group, although the proposal is intended to improve workers’ retirement benefits, implementing it under the current economic conditions would further strain businesses already grappling with high inflation, rising energy costs, foreign exchange volatility, high interest rates and weak consumer demand.
The group argued that Nigeria’s existing 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 and should not be increased without credible actuarial evidence showing it is inadequate.
Director-General of NECA, Adewale-Smatt Oyerinde, criticised PenCom for announcing the proposal before concluding consultations with stakeholders, saying the move undermined meaningful engagement.
He said previous pension reforms followed extensive consultations among government, employers and labour unions, adding that any adjustment should be based on comprehensive economic and employment impact assessments.
Also speaking, Director-General of MAN, Segun Ajayi-Kadir, warned that additional payroll obligations could force businesses to reduce recruitment, delay salary reviews, cut jobs, increase outsourcing or transfer the additional costs to consumers through higher prices.
NACCIMA Director-General, Sola Obadimu, said introducing another statutory financial burden contradicts ongoing government reforms aimed at improving business competitiveness, stressing that policies should be evaluated based on their cumulative impact on investment, employment and economic growth.
Similarly, Director-General of NASSI, Ifeanyi Oputa, warned that micro, small and medium-sized enterprises would be disproportionately affected, noting that many businesses already operate on thin margins and face multiple financial pressures.
The OPSN urged the Federal Government to prioritise inflation control, business sustainability and job creation instead of increasing statutory employment costs.
The group called for a comprehensive assessment of the proposal’s likely impact on employment, wages, inflation, investment, production costs and the survival of businesses before any decision is taken.
It also urged the government to ensure transparent consultations with all stakeholders and delay any increase in pension contributions until broader economic stability is achieved.
According to the OPSN, a sustainable pension system can only be built on thriving businesses, stable jobs and a growing formal economy, warning that reforms that weaken enterprises would ultimately undermine the pension scheme they seek to strengthen.