ABUJA, SEPTEMBER 27, 2016 – A former President, Chief Olusegun Obasanjo, has narrated how a letter written to him by a professor complaining over the non-payment of his pension entitlements got him thinking hard as president on how to come up with a solution to the challenges facing pension schemes in the country.Speaking on Tuesday while addressing African leaders at the Pension Summit holding in Abuja, he stated that pension had posed a challenge to his administration, forcing him to consider setting up a structure that could address it.
The ex-president explained that a professor had sent a letter to him at that time saying he had not received his pension, lamenting that he had faced financial challenges; a development the former president said was displeasing.
After receiving the letter, he said; “I had to think hard. What do we do? We formed a committee led by Fola Adeola. We ordered them to go round the world and get a solution.
“I am happy that what we put in place about 10 years ago has now become so successful that we have well over seven million employees captured from both the public and the private sector.
“We have almost six trillion Naira in pension assets,” he stated.
The elder statesman encouraged African leaders to establish an effective structure that would capture self-employed persons in the pension scheme, ensure effective regulation and supervision pension and security system, adding that such system would provide support and deliver benefits in a secure, coordinated and pragmatic manner to pensioners.
He listed some challenges facing pension schemes across Africa to include untimely release of allocations to pay pensions, weak, inefficient, less transparent and cumbersome structures.
According to him, “Poor coverage and non-inclusion of the private sector, the self-employed and informal segment which is increasingly becoming an important pillar of African economies are also issues which African countries are grappling with.
“Establishment of a viable pension structure for the informal sector is essential. It constitutes 61 per cent of the share of urban employment across the continent.
“It is expected to rise due to projected growth in population fuelled by decline in infant mortality. Urban population growth is projected to reach 60 per cent by 2050.
“These are sufficient incentives to push African governments and relevant authorities to meet the drive for extension of universal coverage of pension and social security benefits, particularly to self-employed and informal sector employees, a major priority,” he told the gathering.
