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Allianz, the global insurer, on 19 April 2023, launched the second edition of its Global Pension Report, which analyses 75 pension systems around the globe using its proprietary Allianz Pension Index (API). The best score on the index is 1, and the worst being 7. With an overall score of 4.3, the Nigerian pension system is at the bottom of the global rankings.

“It is only small consolation that most other African countries have very similar scores,” Allianz said about the Nigeria ranking.

The index consists of three pillars: analysis of basic demographic and fiscal conditions, sustainability (e.g., funding and contribution periods), and adequacy (e.g., degree of diffusion and pension level) of the pension system.

The top five countries on the ranking are Denmark, The Netherlands, Sweden, New Zealand, and United State

According to the statement made available to Financial Nigeria, Allianz said the reason for concern over Nigeria is still the low coverage of the pension system. In addition, access to financial services and financial literacy need to be further improved to foster private pension provision, especially against the background that private households’ net financial assets are also still rather low in international comparison.

According to the report, Nigeria has two big advantages: it (still) has financial leeway as public spending for the elderly is very low and it will remain a very “young” country. The old-age dependency ratio is expected to rise only moderately to 6.8 percent by 2050. Nigeria is set to be one of the countries with the youngest population worldwide. The report advises that the sooner reforms are enacted in Nigeria the better.

Allianz services 49 markets in Africa through offices in Cameroon, Côte d’Ivoire, Ghana, Kenya, Madagascar, Morocco, Nigeria, Senegal, Uganda, Burundi, Egypt, and South Africa – through Allianz Global Corporate & Specialty.