The average Nigerian retiree suffers from all manners of lack and hardship—blame it on the nation’s lack of global economic competitiveness. This ugly situation ultimately leads to short life expectancy, as real funds to pay for quality equipment and services are lacking, including the exit of several doctors and other healthcare professionals to developed nations in search of a higher quality of life.
In countries like Japan, South Korea, and Singapore, retirees benefit from robust social safety nets, including pensions and healthcare, supported by strong economies. For instance, Singapore’s approach ensures that older workers can continue to earn while accessing their pensions, contributing to their financial stability and overall quality of life. Additionally, Jingdezhen, China’s porcelain capital, offers a model for how nations can leverage cultural heritage to drive economic growth and improve the well-being of their ageing populations. By preserving its traditional craftsmanship and leveraging the strength of older artisans, China has created a thriving industry, exporting over $5.3B worth of porcelain annually. All aforementioned nations have strategically invested in their economic strengths, which in turn support the well-being of their ageing populations.
Read also: Retirees die of hunger three decades after serving Nigeria
PPP per capita, or purchasing power parity per capita, is a way to measure how much a person in a country can buy with their income compared to other countries. It shows the value of goods and services that someone can afford, adjusted for the cost of living in their country.
There is some reasonable correlation between the life expectancy of a nation and its PPP per capita. Barring other system peculiarities like taxes, the above table shows how much more people in other countries can afford compared to Nigeria. In Singapore, for example, the average worker can afford up to $127,543 worth of goods and services per year, compared to only $5,695 in Nigeria. This huge difference helps explain why retirees in Nigeria struggle so much. To improve life for our retirees, Nigeria must boost its global competitiveness so our economy can offer more to its people.
Despite the efforts to grow pension assets in Nigeria, the average return on investment (ROI) on these assets remains around 10 percent—significantly lower than the current inflation rate of 33.4 percent. This disparity means that pensioners’ savings are effectively losing value over time, as the returns on their investments do not keep pace with the rising cost of living. Consequently, even those who diligently save for retirement find that their purchasing power is eroded, further compounding the financial challenges faced by Nigerian retirees.
So, what can Nigeria learn from these nations? The answer lies in enhancing our global competitiveness. Achieving export-driven economic growth could be a silver bullet to raise the much-needed liquidity for the economic well-being of your pensioners.
The key solution to pensioner and life expectancy woes lies in producing globally demanded goods. This requires a deliberate focus on specific products, goods and service sectors where we have competitive advantage, leveraging our large youth population, low labour costs, or indeed any other advantage we see as a nation. The countries mentioned above didn’t just stumble upon success; they strategically invested in sectors where they could dominate globally. For Japan, it was technology and automotive industries; for South Korea, electronics and shipbuilding. Nigeria must find and cultivate its niches.
Read also: PFAs face pressure from retirees as FG fails to pay pensions
The recent protests are not just about the youth but also the elderly. Adequate healthcare requires money, and many essential drugs are imported. If Nigeria cannot reverse the trend of job exports and increase domestic productivity, many will continue to live from hand to mouth. Retirees in countries with strong economies don’t face these challenges because their nations have created environments that support longevity and a good quality of life, even in retirement.
Process, policy, and discipline within a system, even with limited resources, can mitigate the adverse effects of our low purchasing power on the health of retirees. Implementing a well-structured and functional HMO system specifically tailored for retirees could ensure they receive consistent healthcare services. Additionally, we must consider how pensions adjust for inflation to maintain retirees’ purchasing power and ensure their financial stability. These steps could help safeguard the well-being of our retirees, despite economic challenges.
About the author:
Sir Mac Atasie is a seasoned strategy consultant and innovation architect who has been a key part of shaping Nigeria’s corporate and technological ecosystem. As CEO of Nextzon and former Head of Strategy at Accenture, he has led many transformative initiatives. He also served as the CEO of HEIRS Alliance, forerunner to HEIRS Holdings, a conglomerate with investments in Transcorp and other notable corporations. With a deep imprint in Nigeria’s financial sector, Mac has designed strategies for leading banks, insurance companies, and regulatory bodies including the CBN, SEC, and BOI.
