This statistic highlights a significant gap in employee benefits across the nation.

According to the report, Zamfara State in the Northwest boasts the highest percentage of employees with health insurance and pension coverage at 65%, while Abia State recorded the lowest, with only 3.9% of wage employees having such benefits. The report states, “The percentage of employees entitled to either pension or health insurance schemes in Nigeria was 26.3%. Zamfara State had the highest (65.9%) while Abia had the lowest (3.9%) among wage employed.”

The low rate of pension and health insurance coverage among Nigerian workers is largely attributed to the country’s high number of informal sector workers. The study indicates that approximately 92% of Nigeria’s employed population is engaged in informal employment, which typically lacks access to social benefits.

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The informal sector is characterized by businesses with open entry and exit, minimal regulation, and variable earnings. These enterprises often do not provide pensions for employers or employees and struggle with inadequate record-keeping. According to the International Monetary Fund (IMF), Nigeria’s informal sector contributed 57.7% to the country’s GDP in 2022, underscoring its significant role in the economy. However, millions of workers in this sector are excluded from traditional pension systems, leaving them vulnerable to poverty in retirement.

Employee benefits, such as health insurance and pensions, are crucial for enhancing job satisfaction, which can subsequently lead to higher productivity and loyalty among employees. The Pension Reform Act mandates that employers with at least 15 employees participate in a contributory pension scheme. Under this scheme, employers must contribute a minimum of 10% of an employee’s monthly salary, while employees contribute up to 8%.

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Similarly, the National Health Insurance Authority Act requires that all employees residing in Nigeria have health insurance. Employers with more than five staff members must enroll in a health insurance scheme, ensuring contributions are made to the public health insurance scheme of the state where they operate. Alternatively, employers can provide private health insurance for their employees under the same act. However, enrollment in health insurance remains low compared to the total population, with only around 18.7 million people currently enrolled, according to the National Health Insurance Agency (NHIA).

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