Analysis of Informal Sector in Nigeria: Implications for Development

Research areas: Year: 2014
Type of Publication: Article Keywords: Informal Sector, Group, More Vulnerable, Development
  • Tpl Emankhu, Sunday Etemini and Tsaku David Isaac
Journal: Journal of Social Sciences and Public Affairs Volume: 4
Number: 2 Pages: 1 - 19
Month: December
The paper explains the role of the informal sector in Nigeria, the constraints it faces, and how the sector can be upgraded and progressively integrated into the development mainstream. Employment opportunities in the formal sector are often limited to lack of skills, social and cultural barriers; the informal sector is often the only possibility for people to get access to employment and to earn an income. Consequently more vulnerable dominate the informal sector. Policies and developments affecting the informal economy thus have a distinctly effect on this group. The informal sector has a high labour-absorption capacity and there is the need to increase the level of stimulation of employment opportunities. This paper is based on a desk and literature review, a web-based research and a field survey using 150 persons in Lafia, Nasarawa State Nigeria. The paper concludes that although the informal sector has its challenges, such as inaccessibility of credit, the people role in the informal finance sector is significant. Partnerships must be built with the emerging associations of groups to create an enabling environment which should include making credit available to more vulnerable at affordable rates, with the private sector assisting government efforts to get credit to the people. A more enlightened, more participatory, and more equitable form of intervention that provides a more appropriate and flexible regulatory framework is needed.