Pension benefits for informal sector workers

General

Saturday, 16 August 2025 by Nhlanganiso Mkhonta

EZULWINI - The conversion of the Eswatini National Provident Fund (ENPF) into a National Pension Scheme seeks to close one of the country’s most pressing social protection gaps.

This is ensuring that informal sector workers, long excluded from pension benefits, will now be guaranteed a monthly income for life.

If the conversion finally gets the nod, for the first time in Eswatini’s history, employees in the informal sector — long excluded from retirement savings — will be eligible for pension benefits under a proposed national pension scheme.

This landmark reform is contained in the ENPF Bill, 2025, currently under parliamentary review and was presented yesterday by ENPF Chief Executive Officer Futhi Tembe and her executive management team during the organisation’s Editors Forum engagement at the Happy Valley Hotel.

The initiative has received firm backing from the Ministry of Labour and Social Security, which reaffirmed government’s commitment to universal pension coverage as part of its 2024–2028 Programme of Action.

According to the International Labour Organisation (ILO, 2023), 59 per cent of Eswatini’s population lives below the poverty line. The country’s social protection system remains fragmented and limited, offering only short-term safety nets and struggling to provide lasting income security — particularly in retirement.

The 2024 Integrated Labour Force Survey, conducted in partnership with the ILO and UNDP, shows that out of the 260 356 employed people in Eswatini, 59 per cent work in the informal sector. This sector is far from marginal — it accounts for 60 per cent of all employment, generates E2.8 billion in monthly turnover and facilitates an estimated E20.5 billion in annual transactions.

It is said that the vast majority of these workers have no access to formal retirement savings, leaving them exposed to severe income shocks in old age. Under the current provident fund model, members receive a once-off lump sum at retirement, the size of which depends entirely on accumulated savings and investment performance. In many cases, these funds are depleted within just a few years, pushing retirees back into poverty and perpetuating inequality.

Tembe stressed that the conversion addresses this vulnerability head-on by moving from a lump-sum model to a guaranteed monthly pension for life, indexed to inflation and underpinned by risk pooling. ENPF General Manager Operations Miccah Nkabinde said the ENPF Bill proposes the establishment of a mandatory defined benefit pension scheme covering all economically active persons in Eswatini. This includes both formal and informal sector workers, with special arrangements for self-employed contributors whose pensionable earnings will be determined by prescribed formulas. Nkabinde said at commencement, membership will be open to individuals aged 45 years or younger.

Full article available in our paper.

Eswatini National Provident Fund (ENPF) CEO Futhi Tembe making her presentation, where she highlighted the history of the fund and the purpose of the conversion. (Pics: Nhlanganiso Mkhonta)