Private Sector Rejects Proposed Pension Hike, Warns of Higher Business Costs
NECA, MAN, NACCIMA and other employer groups say additional pension burden could slow investment and job creation
By GLEBM News
Nigeria’s organised private sector has urged the Federal Government to suspend plans to increase mandatory pension contributions, warning that the proposal could place additional financial pressure on businesses already grappling with high operating costs and a challenging economic environment.
The position was jointly presented by the Organised Private Sector of Nigeria (OPSN), which comprises the Nigeria Employers’ Consultative Association (NECA), the Manufacturers Association of Nigeria (MAN), the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), the Nigerian Association of Small and Medium Enterprises (NASME), the Nigerian Association of Small Scale Industrialists (NASSI) and other employer groups.
The employers expressed concern over proposals by the National Pension Commission (PenCom) to review pension contribution requirements, arguing that any increase should only follow comprehensive economic and employment impact assessments.
Speaking on behalf of the coalition, NECA Director-General, Adewale-Smatt Oyerinde, said the private sector supports efforts to strengthen Nigeria’s pension system but cautioned against introducing additional statutory obligations without broad stakeholder consultation.
According to him, businesses are already contending with rising production costs, high energy prices, exchange-rate volatility, elevated interest rates and weak consumer demand.
He noted that increasing payroll-related costs at this stage could discourage recruitment, delay salary reviews and reduce business expansion.
The OPSN also argued that Nigeria’s existing mandatory pension contribution rate compares favourably with international benchmarks, insisting that any proposed review should be supported by clear actuarial evidence demonstrating its necessity.
Manufacturers Association of Nigeria Director-General Segun Ajayi-Kadir warned that additional labour costs could ultimately be transferred to consumers through higher prices while also affecting investment decisions within the manufacturing sector.
Similarly, NACCIMA Director-General Sola Obadimu said policymakers should carefully evaluate the cumulative impact of new statutory obligations on business competitiveness, employment and investment before implementing further reforms.
The coalition called on the Federal Government and PenCom to prioritise inflation control, business sustainability and job creation while continuing consultations with employers, organised labour and other stakeholders on the future of pension reforms.
