The Organised Private Sector of Nigeria (OPSN), which includes key associations such as the Manufacturers Association of Nigeria (MAN) and the Nigeria Employers’ Consultative Association (NECA), has expressed significant concern over the National Pension Commission’s (PenCom) proposed increase in mandatory pension contributions by an additional three percent.

The OPSN cautions that this proposal could harm employment, wage growth, and business sustainability, potentially leading to increased compliance risks.

The viability of any pension system hinges on business survival and the capacity for consistent contributions from employers and employees.

Currently, Nigeria’s pension contribution is set at 18 percent of an employee’s salary, which aligns closely with the OECD average. Any proposed increase must be backed by Nigeria-specific actuarial evidence and must not jeopardise jobs or compliance.

Speaking on the development, Mr. Adewale-Smatt Oyerinde, Director-General of NECA, emphasided that the proposal is premature and risks undermining stakeholder engagement.

noted that previous adjustments followed extensive discussions amongst relevant parties and called for credible assessments to support any changes.

Also the Director-General of MAN, Mr. Segun Ajayi-Kadir, highlighted that businesses face numerous challenges, including high energy costs and inflation. An additional payroll cost could lead to slower recruitment, wage stagnation, job cuts, and increased consumer prices.

In his remarks, Mr. Sola Obadimu of NACCIMA warned that imposing further financial burdens could counteract the government’s efforts to improve the business environment.

Coordinated policies that consider their overall impact on employment and investment are essential for genuine recovery. (Nigerian Tribune)