The ever slow pace with which Micro Pension Plan (MPP) is being subscribed to has been a source for concern for the operators, regulators and other stake­holders.

Launched by the immediate past Pres­ident Muhammadu Buhari in 2019, four years down the line not much has been achieved in terms of numbers of contrib­utors and of course, micro pension assets under management.

The MPP was launched to bring into the pension net, work­ers in the informal sector of the economy who are said to consti­tute over 87.9 percent working class citizens.

They include professionals such as accountants, lawyers and others in private practices, artisans, mechanics, welders, operators of small and medium size businesses, among others, who are not in paid employments.

Experts who spoke with Dai­ly Independent are of the view that both the regulators and op­erators have not done enough to create awareness and educate the masses on benefits of the plan to deepen penetration.

According to statistics, only 105,455 subscribers have bought into the scheme since inception contributing N435.61 million in four years. This figure represents an average contribution of N108.9 million by 23,363 registrations an­nually.

Mr. Ehimeme Ohioma, the Head of the Surveillance Depart­ment, representing the Director General, Aisha Dahir-Umar, in one of the media engagements in Lagos recently disclosed that the total contingent withdrawal by MPP contributors amounted to N30.3 million while there was an increase in the conversion from the informal sector to the formal sector, amounting to N6.5 million, involving 587 Retirement Savings Account holders.

Despite the slow pace with which the plan is running, the commission is optimistic that the initiative will contribute to economic growth by offering a reliable income source for retir­ees and reducing dependence on others in old age, thereby lowering the poverty rate as the objective of the Micro Pension Plan (MPP), is to cultivate a savings culture among low-income earners and self-employed individuals across the nation.

Mr. Dauda Ahmed, the Head of the Micro Pensions Department, listed several implementation challenges faced by the scheme, including lack of awareness, mistrust regarding the scheme, insufficient incentives, low finan­cial literacy, inadequate service delivery, increase in poverty, slow adaptation of the scheme, issues related to benefit payout, the need to simplify document require­ments during registration, and weak economic indicators such as inflation.

During the panel sessions, all of these matters were extensively discussed, providing an opportu­nity for stakeholders to actively participate, ask questions, and gain a deeper understanding of the intricacies of the Micro Pen­sion Plan.

Samuel Inyang, a Port Har­court based pension expert, lik­ened the slow pace of micro pen­sion penetration to the Nigerian economy itself.

According to him, the scheme just like the economy has been struggling over the years due to a number of factors.

“The Micro Pension Scheme launched in 2019 has been strug­gling due to the following reasons: Just like the Nigerian economy which has been struggling in the past years, majority of those the scheme was meant to bring in have been struggling to survive. It is only in a thriving economy that people can effectively save money,” Inyang noted.

Inyang, who is former Manag­ing Director and Chief Executive Officer at Oak Pensions Limited, argues that there are no sufficient incentives to patronise the scheme from both the regulators and oper­ators, stressing that the return on investment (RoI) in the pension in­dustry has been very much below inflation rate for years now with no serious added value to those saving.

He pointed out that there is lit­tle or no flexibility in the scheme, citing his experience while he was active in the industry, that a prom­inent Nollywood actress asked why she should save her money in the scheme and if she has need to use it there will be restrictions. Despite all attempts to convince her, she insisted that she would rather invest in properties than in micro pension.

In order to grow the scheme, the investment expert said, “The regulators need to be more flexi­ble in their approach. They should borrow a leave from the model operated in Ghana with lots of flexibility by both the regulators and operators. Savers should be allowed to withdraw as much as they want and once the confidence is built up in the scheme, the Fund will do better in no distant time.”

Corroborating Inyang’s posi­tion, Usman Suleiman, also a pen­sion expert, said, “It is clear that the expectations from the Micro Pension Scheme were unfounded. The scheme has truly flopped.”

For Suleiman, “The only way to rescue the scheme and stand a chance of realising the expecta­tions in my view, is for the indus­try to invest heavily and massively in repackaging, publicising, pro­moting and selling the scheme.”

He asserted that the informal and micro operators are pres­ently in great need of resource conservation. Hence to make them voluntarily partake in any scheme, such a scheme will have to be made to look truly worth investing in.

For the operators, they are not unmindful of the fact that the scheme has not made the desired impact since its inception four years ago.

According to them, they are working to engage the govern­ment to be part of that by also adding to what individual contri­bution is as an incentive just like it is happening in other climes where micro pension actually grows.

Speaking to the issue with Daily Independent, Mr. Aguche Aguda, Chief Executive Officer, Pension Funds Operators Asso­ciation of Nigeria (PenOp), said that the Micro Pension Plan was incepted in 2019 and in 2020 there was COVID-19 so in that year peo­ple did not have much disposable income.

He noted that in countries where micro pension has actu­ally grown enough, there is also government’s backing where governments add to individual contributions.

“In countries like Rwanda and Kenya, their governments add to what individual has contributed. If an individual contributes ten thousand naira, the government would also mark it up with ten thousand naira. So, here in Ni­geria we are trying to engage the government on that. Most of the people out there are on low in­come bracket so we are working on that.

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