The Lagos Chamber of Commerce and Industry (LCCI) has called on the federal government and the National Pension Commission (PenCom) to suspend the proposed three-percentage-point increase in mandatory pension contributions, saying that such increase will raise cost of employment.
The LCCI said that while strengthening retirement security is a legitimate objective, increasing payroll costs at a time when businesses are struggling with high financing costs, persistent inflation, exchange rate pressures, rising energy prices, and multiple taxes that are yet to be addressed by the Nigeria Tax Act 2025 will weaken enterprise sustainability and slow job creation.
Comparing Nigeria’s current mandatory pension contribution to other country, the LCCI Director General, Dr Chinyere Almona said Nigeria contribution of 18 per cent; (10 per cent from employer and 8 per cent from employee) is already broadly aligned with the OECD average of 18.8 per cent, noting that raising it to about 21 per cent would place Nigeria above many comparator economies, including the United Kingdom which has 8 per cent , the United States with 12.4 per cent , Kenya 12 per cent subject to earnings caps and South Africa, where no equivalent mandatory private-sector pension contribution exists.
She explained that the proposed increase will raise the cost of employment, discourage recruitment and wage growth, disproportionately burden MSMEs, reduce Nigeria’s competitiveness for investment, and increase the risk of non-compliance and business informality, adding that a stronger pension system cannot be built on weaker businesses.
