Micro-Pension Plan, Inclusive Social Protection





True to the notification, last Thursday President Muhammadu Buhari launched the micro pension plan (MPP) which automatically extends retirement benefits to millions of self-employed workers in the informal sector.

As a contributor to the 15-year-old Compulsory Pension Scheme (CPS), my interest on the developments in pension industry is a total commitment. I also bear witness that the compulsory contributory pension scheme is working to the extent that I get my regular alert from my Pension Fund Administrator (PFA) about the status of my RSA (Retirement Savings Account).


The point cannot be overstated. Pension Reform Act was enacted on 25th June 2004. It came into effect on the 1st July 2004 after extensive deliberations by all the stakeholders, notably organized labour and organized private sector employers. Pension Reform Act of 2004 was the most significant legislation of the 2nd National Assembly. Before the new Act, the old scheme had pension deficit of about N2.3 trillion Naira in 2004. Pensioners were not being paid entitlements regularly. Pensioners died on verification queues while billions of pensions fund were looted.


The Act’s laudable objectives include saving for old age, workers receive their retirement benefits as and when due, halt the growth of outstanding pension liabilities,” The contributory scheme is fully funded with employers contributing 10 per cent and employees contributing 8 per cent deducted directly from workers’ salaries and promptly transferred to workers’ retirement savings accounts.

Today Pension assets have grown from N2.9 trillion in 2012 to over N6.5 trillions, thanks to the efforts of the successive leaderships of the National Pension Commission (PENCOM). The Scheme was amended in 2014. Significantly the Act was amended to widen the scope of coverage to include the informal sector, tighten sanction for non-compliance and review the rates of contribution among others. The rates were also made equitable with employers paying more than the workers. Employers contribute 10 per cent while workers contribute 8 per cent making a total of 18 per cent as against the inaugural 15 per cent (7.5 per cent each).   With the amended PRA 2014, PenCom initiated the framework for the Micro Pension Scheme that targets the informal sector, which was rolled out on Thursday. 

The provision of the Pension Reform Act 2014 (PRA 2014) applies to all employees in the Public Service of the Federation, Federal Capital Territory, States and Local Governments and the Private Sector Organizations in which there are three or more employees. However, Section 2(3) of the Act provides that employees of organizations with less than three employees as well as self-employed persons shall be entitled to participate under the Contributory Pension Scheme in accordance with Guidelines issued by the Commission. The categories of persons referred to in Section 2(3) of the PRA 2014 constitute the vast majority of the working population. They are mostly the unemployed tailors, artisans, and road transport workers among others. Every workingwoman and man needs social protection and some safety net after work, failing which work remains precarious. The challenge is how to work out a framework that would address the flexible and unstructured nature of informal sector work.


It is commendable that the Commission “considers it necessary to develop a framework for the implementation of the provisions of Section 2(3) through a “Micro Pension Plan”. Micro Pension refers to an arrangement for the provision of pension to the self-employed and persons operating in the informal sector through the Contributory Pension Scheme. Beyond the presidential launch on Thursday, Pencom must utilize various channels of communication in educating the public on Micro Pension Plan. The most important and effective channels should be periodic town hall meetings with trade Unions, trade Associations and Cooperatives to educate members, proffer clarifications and address concerns on Micro Pension Plan. Trainings must also be organized for leaders of Unions, Associations and Cooperatives to be Micro Pension champions to coach and enlighten their members. All done, the nagging questions that hunt the formal sector pension coverage remain. Will Micro Pension Contributors have access to a portion of their RSA balance? 

Mrs Aisha Dani’s-Umar answered this question at the launch. According to her, every contribution shall be split into two: 40 per cent for contingent withdrawal and 60 per cent for retirement benefits. Will Micro Pension Contributors also qualify for Minimum Pension Guarantee provided they satisfy the requirement outlined in the Guidelines on Minimum Pension Guarantee? The income of most persons targeted for Micro Pension Plan is usually irregular and inadequate. Will contributions be made flexible unlike in the formal sector where contributions are fixed?  It is refreshing that Pencom agrees that the frequency of remittance of contributions “could be daily, weekly, monthly or as may be convenient to the Micro Pension Contributor provided that contributions will be made in any given year”. The Thursday launch was indeed better late than never. The President’s stamp would definitely legitimize the Contributory pension scheme in both formal and informal sectors. If implemented pension coverage would be more inclusive to include millions of self employed who for now are not assured of life after work no less they are assured of life during work due to income inadequacy. Not only that, there would be sustainable investable funds for socio economic development. So far with as many as 8.5 million formal sector workers covered, as much as N8.7 trillion pension assets have been accumulated.

With potential 80 million workforces, the potential for accumulated workers’ capital is better imagined. Micro pension is certainly a sustainable measure against mass income poverty that has pushed workers in both formal and informal sectors into the abyss of poverty. With the micro pension launch and expected attendant increase in pension assets, there is no doubt that the nation is also assured of investable funds for poverty alleviation as well as wealth generation. 


 Idiagbon Patriotism in Discourse 

It was the 20th anniversary of the death of Major General Babatunde Abdulbaki Idiagbon a week ago.

He was the 6th Chief of Staff at the Supreme Headquarters of the military regime headed by Major General Muhammadu Buhari (1983 to 1985).  He was de facto Vice President, albeit under the military regime.

Given the nationally acknowledged comradeship between him and his Commander-in-Chief, Major General Idiagbon passed for “a co- Commander -in-Chief” for the two years the regime lasted. One notable feature of Military regimes is strong totalitarian single leadership. Buhari-Idiagbon (as the regime was so-called!) proved a remarkable exceptional military leadership with robust complementarity of the two strong but agreeable leaders.  Yours comradely loathes military dictatorships.

Indeed together with many of my comrades, we spent better part of our undergraduate days in the 70s and 80s confronting military regimes with documented enormous sacrifices. But notwithstanding our passion for democracy, quest for good governance and nation building, some military leaders (not necessarily military regimes!) captured national imagination in terms of their patriotic and selfless programs.  Reading late Thomas Sankara of Burkina Faso on pan Africanism any day is spiritually uplifting for any African.

I have read umpteenth times, Murtala Muhammad’s Africa Has Come of Age. After Kwame Nkrumah’s no speech decisively damned colonialism and Western imperialism Like Murtala’s. Buhari / Idiagbon regime was referred to as “an offshoot” of Murtala Muhammed regime in terms of its dazzling leadership- by- example, audacious head on fight against corruption, indiscipline, insistence on probity and accountability, defence of national interests against Western imperialism, colonialism and racist apartheid regime in Southern Africa. In remembering Idiagbon, we are certainly hunted by the same spectre of leadership question. Late Chinua Achebe aptly puts it: `The trouble with Nigeria is simply and squarely a failure of leadership. There is nothing basically wrong with the Nigerian character’. Achebe’s observation made in the 80s still remains valid today.

But while it’s a worthy national enterprise to search for ideal leadership, the point cannot be overstated that Nigeria has produced a number of both civilian and military leaders who have made historic positive impacts. It’s time we contextualized national leadership discourse, recognized good leaders for who they are: good leaders. The founding fathers and mothers regardless of their partisan differences fought British colonialism and extracted independence through principled negotiations. They successfully lowered the Union Jack and the hoisted Nigeria’s Flag Green White Green in 1960. That was Patriotism. A group of military officers rose to defend Nigeria’s unity during an unfortunate and avoidable civil war, which claimed millions.

The late Chief Obafemi Awolowo offered leadership by quitting the Gowon’s war-cabinet when General Yakubu Gowon (after commendably leading the unity war), reneged on the promise to return to Nigeria to civil rule in mid-70s. That singular civilian leadership set the stage for a national pressure for democratization.

General Murtala Muhammed rose to the occasion to offer a decisive leadership. He audaciously announced an unprecedented comprehensive political programme aimed at returning Nigeria to civil rule. General Olusegun Obasanjo commendably kept to the date in October 1979. It’s time we recognized some leaders, who given the historic reality and circumstances offered to be counted on side of nation building. General Tunde Idiagbon was a key member of Nigeria’s military governments in that decade of national turmoil’s of coups, counter-coups, civil war and demoralization (1966 and 1979). More studies will show what role he played during that decade of national anxiety. He served as a military administrator of the old Borno state.

However his visibility and prominence in Buhari’s military government remain the reference point. The acclaimed and celebrated policies and initiatives of that regime bore his authority in implementation as much as in articulation. He was credited with star policies of the regime that included: War Against Indiscipline (WAI) which manifested in Phase One – Queuing, launched on 20 March 1984, Phase Two – Work Ethics, launched on 1 May 1984, Phase Three – Nationalism and Patriotism, launched on 21 August 1984, Four – Anti-Corruption and Economic Sabotage, launched on 14 May 1985, Phase Five – Environmental Sanitation, launched on 29 July 1985. Currency change and currency exchange rate policy. 

The most significant was the aggressive Import substitution industrialisation policy. In 1984, Idiagbon implemented the military government’s import substitution industrialisation policy based on the use of local materials. The aim was to ensure the growth of local industries. He also launched on behalf of the regime Go Back to Land Programme. Nigeria must revisit some of these socio economic initiatives within the context of the present national and global reality.

General Idiagbon just like President Muhammed Buhari had shown that integrity really counts in private and public life. Some 35 years he left public office, no single case of corruption has been linked to him. Not few living public officers are in accountability crisis of different forms. Looking at his pedigree, it is clear that the late General was prepared and trained for public service.

Idiagbon was born in the fullest of time on 14 September 1943 in Ilorin. It was the decade of decolonization and nation building. Idiagbon was a product of new Nigeria emerging from the ashes of colonialism. Which might explain some of the patriotic dispositions of him and his colleagues. There was once a Nigeria, which impounded British plane in response to British government seizure of Nigeria Airways plane in 1984?  General Idiagbon was at the centre of it all.

Following the notorious Umaru Dilkko affairs, British government detained a Nigeria Airways Boeing 707 cargo plane. In retaliation, Nigeria detained a British Caledonian Airways Boeing 747 passenger plane. The two-day diplomatic row was eventually resolved amicably.

Idiagbon was truly home grown. He attended Ilorin United School, an institution founded by the Ilorin Emirate Descendants Progressive Union, for his primary education between 1950 and 1952.In 1953,General Idiagbon proceeded to Okesuna Senior Primary School, Ilorin, from where he finished his primary education in 1957. He attended Nigeria Defence Academy (NDA). He also bagged a Bachelor of Arts degree in Economics among the few “officers who obtained a University degree while in the military service”. He attended Pakistan Command and Staff College. He was a member of National Institute, Kuru Jos, of Senior Executive Course 3 in 1981. He valued dignity of labour, hard and smart work, which singled him out as an outstanding gallant soldier who held various command posts. He was a recipient of many defence awards that include Defence Service Medal (DSM), Forces Service Star (FSS)  General Service Medal (GSM) and National Service Medal (NSM).

He died on 24 March 1999 in Ilorin, Kwara state at the age of 56 years.

May Allah grant him eternal rest?

  • Comrade  Aremu, mni, is the

General  Secretary  of the National Union of the Textile, Garment and  Tailoring Workers of Nigeria (NUTGTWN) and Vice President of NLC.