In some circles, the informal sector has been referred to as the grey economy, shadow economy, underground economy, parallel sector, and the cash economy.
- Econet Life, an
EcoCash Holdings Zimbabwe insurance unit, has launched a unique micro-pension fund product that allows people in the informal sector to save for retirement - The new product, called
Dura/Isiphala Pension Fund , was launched in Kariba at the weekend and is expected to drive the uptake of pensions by workers in the informal sector - Meanwhile, on
March 27, 2019 , President of NigeriaMuhammadu Buhari launched the Micro Pension Plan (MPP) as part of his administration's efforts to ensure that Nigerians who worked hard during their active years in service of their fatherland live in dignity and retire without any cause for alarm
According to national statistics, the informal sector's contribution to Gross Domestic Product (GDP) is estimated to be below 50 per cent. According to the
The 2022
According to an article by The Independent dated
Defining the informal sector
Formal arrangements include adherence to contracts in business transactions, applying labour regulations, social security contributions, banking proceeds, paying requisite taxes and council levies, and following legal channels for importing and exporting goods.
Therefore, those employed in the informal sector are not subject to national labour legislation, income taxation, social protection, or entitlement to certain employment benefits such as maternity leave.
Econet Life, an
The new product, called
Dura/Isiphala positions Econet Life as the only innovative pension company using technology to drive financial inclusion. The new product is set to empower SMEs, co-operatives, civil servants, and individuals in formal and informal employment between the ages of 18 and 70.
Speaking at the
"We appreciate you (Econet Life) for your continued support and innovations centred around improving the lives of our SMEs," the Deputy Minister said.
Econet Life's chief life and principal officer,
"We continue to re-think efficient ways to serve our communities. Pension should never be a preserve of the formally employed; everyone should have access to equal opportunities that help them live a better life, whether they are formally or informally employed," he said.
Emmanuel Pfupa, the Head of Econet Life Fund Business, said the micro-pension fund will promote inclusive growth in the pension industry by enabling individuals in the informal sector to open retirement savings accounts which, until now, were only available for employees in the formal sector.
"With
Although the informal sector accounts for a big proportion of
However, with Dura/Isiphala, people in the informal sector can contribute anything from as low as
Econet Life said registrations and contributions can be done at
Meanwhile, in a related article by This Day published on
The MPP was initiated by the
Since the launch of the scheme by Buhari, a total of 72,846 contributors have been registered by Pension Fund Administrators (PFAs). The micro pension scheme targets the significant majority of
At the launch, Buhari had said the scheme was part of his administration's efforts at ensuring that Nigerians who worked hard during their active years in service of their fatherland live in dignity and retire without any cause for alarm.
He said the federal government understood the importance of the pension industry, adding that this was why the micro pension plan was conceived to afford operators in the informal sector something to fall back on when they retire from active service.
The president added that his administration had, within the past three years, provided grants, technical support, and loans to small businesses, thereby effecting positive changes in their lifestyle.
In
Before now, these categories of workers and those organizations that employ less than three employees were not captured under the Contributory Pension Scheme and as such, not mandatorily covered by any retirement benefits scheme.
But with the amended Pension Reform Act of 2014, Section 2(3) has now made provision for employees of organizations with less than three employees, self-employed persons, and persons operating in the informal sector to participate in the Contributory Pension Scheme under the Micro Pension Plan.
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