Olatunde Amolegbe, the CEO of Arthur Stevens Asset Management Limited, has called on stakeholders in the insurance and pension industries to formulate effective strategies aimed at integrating the vast informal sector into formal insurance and pension schemes.
Speaking at a recent Lagos conference, Amolegbe emphasized that the informal sector accounts for nearly 70 million workers in Nigeria, representing a significant portion of the nation’s labor force.
He underscored the importance of the insurance and pension sectors as vital components of the financial services industry, capable of mobilizing substantial long-term investment capital.
Despite their potential, Amolegbe lamented that these sectors have remained underdeveloped for years, primarily due to widespread public skepticism and limited awareness of their benefits.
Drawing attention to the low coverage rates, he revealed that only about 26.3% of Nigerian employees had access to pension plans and health insurance as of 2023, a situation largely attributed to the dominance of informal employment.
“Nearly 92% of Nigeria’s workforce is engaged in the informal economy. Adoption of voluntary micro-pension schemes has been minimal; by December 2024, only 172,936 individuals had registered, six years after the scheme’s launch intended to include informal workers,” he explained.
Regarding insurance, Amolegbe pointed out that Nigeria’s insurance penetration remains below 1%, a stark contrast to countries like South Africa (11.54%), Namibia (7.41%), Morocco (4.10%), Kenya (2.25%), and the global average of 6.8%.
To tackle these challenges, he stressed that rebuilding trust and confidence among informal sector workers is the crucial first step for industry players seeking to expand coverage.
“Without restoring their trust, it will be difficult to encourage informal workers to commit their funds to pension and insurance products, especially if they perceive limited access or benefits,” he added.
Amolegbe also urged industry operators to simplify enrollment processes by leveraging modern technology, suggesting the establishment of micro Pension Fund Administrators (PFAs) that operate within communities predominantly occupied by informal workers.
He encouraged insurance providers to capitalize on the momentum generated by NIIRA 2025 to enhance financial literacy among young Nigerians, fostering a culture of saving through insurance and pension products.
Highlighting sectoral progress from 2020 to 2024, Amolegbe noted significant growth, positioning pensions and insurance as foundational pillars for economic resilience and capital market development. Pension assets surpassed N23 trillion in 2025, representing about 8.6% of Nigeria’s GDP.
During this period, public sector pension contributions surged by 71.7% to N5.89 trillion, while private sector contributions increased by 65.7% to N5.42 trillion. In Q4 2024 alone, contributions amounted to N342.23 billion, with total assets under management reaching N22.51 trillion.
Nevertheless, he acknowledged that overall penetration rates remain under 1%, lagging behind regional counterparts such as South Africa, Namibia, Morocco, and Kenya. He emphasized the critical role of pensions in fostering long-term investments, alleviating elderly poverty, enhancing social stability, and reducing reliance on families and government support.
Furthermore, Amolegbe highlighted the advantages of insurance in mitigating financial risks, enabling businesses to expand confidently, stabilizing the economy by compensating for unexpected losses, and attracting foreign investment through comprehensive risk coverage, thereby boosting capital inflows.
