In recent years, Nigeria has witnessed a powerful wave of “Japas” – skilled workers, young professionals and entrepreneurs moving abroad in search of greener pastures. At the same time, the rise of hybrid and remote work means that many Nigerians remain connected globally, working for foreign firms, earning in dollars, or living abroad partly while remaining connected to Nigerian employers. These migrants represent a huge potential for foreign investment in the country that is largely untapped.
Thankfully, the National Pension Commission (PENCOM) recently released a landmark guideline on foreign currency contributions under the Contributory Pension Scheme (CPS), allowing Nigerians abroad and foreign professionals in Nigeria to contribute in US dollars. This is a major step forward – not only aligning Nigeria's pension system with global realities, but also providing a new medium to preserve value and boost the naira by attracting fresh dollar inflows.
Under the new regulation, eligible participants – Nigerians living or working abroad and expatriates paid in foreign currency in Nigeria – can remit their pension contributions only in US dollars, which are deposited into dedicated foreign currency retirement savings accounts (RSAs). For Nigerians in the diaspora, the remittance route runs through Non-Resident Nigerian Ordinary Accounts (NRNOAs), while those earning in foreign currency in Nigeria must use domestic accounts linked to their Pension Fund Administrator (PFA) custodian bank. The PFA will invest such contributions in a specific “dollar fund”, which will focus on dollar-denominated assets such as Eurobonds, supranational bonds and US-backed instruments. Contributors can withdraw profits in dollars or alternatively convert them into Naira at prevailing rates on or before retirement, subject to the withdrawal rules provided. The rationale is to stabilize pension value for globally mobile workers, reduce currency risk and open the Nigerian pension system to a broader global labor pool.
One of the most compelling benefits of this reform is its potential positive impact on the Naira. Dollars sent into these RSAs mean fresh foreign exchange inflows into the Nigerian banking and pension ecosystem. As more Nigerians abroad choose to remit some of their income home through pension contributions, the cumulative effect could reduce foreign exchange shortages, ease pressure on the naira and boost outbound investment in local productive assets. In other words, while the CPS traditionally operated in Naira and was exposed to devaluation risk, the new dollar-denominated currency provides a natural hedge. For contributors, this means greater value protection; For Nigeria, this means stronger external currency inflows and enhanced credibility of the pension industry.
The reform addresses a long-standing gap. For many years, Nigerians earning abroad were effectively excluded from automatic participation in the CPS because contributing in Naira meant currency losses, conversion hassles and delays in remittances. Meanwhile, foreign professionals in Nigeria have had to choose from multiple pension options. By opening up a clear path to dollar-based contributions, PenCom makes the CPS truly inclusive. The broader workforce – Nigerians in the diaspora and international talent – now has a simple, regulated means to secure retirement savings in a globally transferable currency. This helps expand coverage, deepen capital markets and provide Nigeria with a competitive pension offering.
Also read: Pencom extends pension scheme to expatriate Nigerians, foreigners
However, despite its good intentions, it all comes down to implementation – the existing local plan still struggles to gain acceptance, and its full potential is being undermined by misinformation and low education. PFA, PFC and Pencom need to increase their education and advocacy locally because people abroad will rely heavily on the opinions of their family and friends in Nigeria in making these decisions. Furthermore, operators need to find creative ways to capture the hearts and pockets of the expatriate market that exists there.
To all Nigerians abroad, the message is clear: this is your moment. Harness your earning power, secure your retirement in a currency in line with your global income, and stay connected to your homeland's pension system. Register with a licensed PFA or continue the one you had before you left, open your Forex RSA, and start contributing in US dollars today. For foreign professionals working in Nigeria, connect with your preferred PFA and participate with confidence – you get access to a regulated pension arrangement denominated in a globally accepted currency. In both cases, you're not just saving for retirement; You are participating in a reform that strengthens the entire Nigerian pension landscape.
For Nigeria as a whole, this improvement is a sign that the pension industry is evolving to match the modern world of remote working, global mobility and integrated savings. By adopting dollar contributions, Pencom is sending a message: Nigeria's CPS is no longer just a domestic scheme – it is open, globally competitive and investor-friendly. If stakeholders collaborate thoughtfully – educating PFA participants, banks facilitating smooth remittances, and regulators ensuring transparency – the reform has the potential to become one of the most transformative in the industry's two-decade history.
In short, whether you're in Lagos or London, Abuja or Atlanta, you now have a pension option that speaks your currency. Let's make it count – for your future and for Nigeria's financial resilience.
Omagbitse Barrow is a pensions and financial literacy advocate and chief executive of Abuja-based strategy consulting firm, Learning Impact (www.learningimpactmodel.com).
