Nigeria is struggling to get informal workers to save
Between a slumping economy and gnawing inflation, Nigerians are finding life tough. Temilola Balogun, who owns a clothing shop in Lagos, the commercial capital, sighs that it is hard to save anything. This is typical: most adults in Africa’s most populous country do not pay into a pension. Few will be able to retire without being supported by their children.
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To change this, in 2019 the government started a “micro-pensions” scheme aimed primarily at informal workers, who make up 80% of the workforce. This is more flexible than old-school pension plans that have hefty fees, high minimum contributions and, in some cases, charge penalties for missed payments.
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Similar plans have worked in countries such as Kenya, which in 2011 launched its Mbao plan. It allows savers to contribute as little as 20 shillings ($0.19) a day. By 2018 it had 100,000 members. Nigeria hopes that 30% of working-age people will have pensions by 2024.
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