access to PPE, sanitary infrastructure for hand washing and sanitizing, and access to health kits for frequent health checks. For instance, the electricity requirements are huge in areas such as laundry services, hairdressing and printing, while it is moderate for photography and catering for instance. Downloadable! The study examines The Informal Sector and Employment Generation in Nigeria. An inclusive policy is one recognising and involving informal waste workers in solid waste management while also yielding improvements in their lives and waste management performance. This is found to be relatively expensive and translates to a higher cost of production. This should be at low costs in order to increase their attractiveness to prospective trainees. Still, despite this harsh reality, Salewa and her family are in a better position than the millions of individual construction workers, tradesmen and women, restaurant service workers, street vendors, market salespeople, and the millions of low-income Nigerians whose livelihoods have disappeared. major growth in the services sector—including in telecommunications, banking, Nollywood, and the informal economy (which was previously unaccounted for in official statistics). However, the However, this formal-informal overlap comes with risks, especially when it comes to consumables. Like many other developing countries, the sector is considered crucial to job creation as it accounts for about 90 percent of jobs in the country. Academia.edu is a platform for academics to share research papers. Lagos’ growing informal economy sector. It is noteworthy that India’s poverty numbers appear more benign than Nigeria’s due to its high population. The Divisional Head, Large Enterprises, Bank of Industry, Mr. Joseph Babatunde, has said that more than 17 million small businesses in Nigeria are in the informal sector and not registered with the Corporate Affairs Commission. Inflation Rate and Yields Movement, Public Debt This poverty situation in Nigeria is unarguably worrisome and it demands urgent policies that boost employment and aggregate income. With a stretched economy and inflation at 13.22% in August 2020, there has been a surge in investments towards attaining financial security locally and internationally. There is no doubt that for these micro-enterprises and entrepreneurs in the informal sector, the rebuilding process will outlast the existence of the virus. With an estimated population of 1.3billion, 5.26% of Indians live in extreme poverty. Taking into consideration the current state of these businesses, many financial service providers have adopted moratoriums and reduced/no interest rates for small businesses. Nigeria’s GDP as at the end of 2015 was about N94.1 trillion out of which N38.7 trillion is from the informal and another N55.3 trillion formal. Nigeria’s average electricity output per day of about 3,500MW/hour has been significantly below installed capacity of about 7,500MW, while gas unavailability accounts for approximately 45% of total generation constraints. 1. Price Pressure Persists - Pentad, You would be the first to know the latest happenings around the Financial Market on, Proshare is Nigeria’s Premier Financial, Business and Economic Information Hub (since 2006), Registered Office: Plot 590B, Lekan Asuni Close, Omole Phase II, Isheri LGA, P.O. A new approach is expedient. By comparison, 45% of Nigerians live in extreme poverty. 17/156 Subject: Econometric models Informal sector National accounts Shadow economy Sub-Saharan Africa Public Debt Women and the Informal Sector in Nigeria: Implications For Development The purpose of this paper is to evaluate the role of informal sector towards Job creation and poverty reduction in Nigeria. The ravages caused by the coronavirus have equalised the playing field across the globe: not one country will come out of this untouched. Nigeria is now the country with the highest number of extreme poor, with 87million Nigerians in abject poverty. Human Capital Remains Key to Unlocking Nigeria’s Economy, 20. The National Bureau of Statistics (NBS) put Nigeria’s unemployment rate at 23.1 percent. Employment Rate in Nigeria decreased to 76.90 percent in the third quarter of 2018 from 77.30 percent in the second quarter of 2018. source: National Bureau of Statistics, Nigeria. PPE, thus creating new business models that can thrive in the current climate, and furthermore, driving enhanced innovation and increased private sector participation alongside government efforts. This growth in the informal sector and an increase in employment would imply higher household income and lower poverty in Nigeria. IS seems difficult to tax because of administrative problems, human capital and personnel shortage, lack of record keeping, nature of its economic activities and cost implications. As we go into the real world, we have to recognize the contribution of their labour to our education and commit to improving their lives. Her husband, who runs a private taxi service, has gone from approximately twenty customers a day, to about three to four customers a week. Though Nigeria approved a national solid waste management policy earlier this year, it does not provide a plan to include the large informal sector. The study used consumption-expenditure per adult equivalent and the P-alpha class poverty measure to determine the rate of poverty. However, this year is unlike any we could have imagined – and for those whose welfare are reliant on the daily income of the informal sector, and who cannot “work from home”, the reality is bleak. So, where do we begin? It also finds significant heterogeneity, with informality ranging from a low of 20 to 25 percent in Mauritius, South Africa and Namibia to a high of 50 to 65 percent in Benin, Tanzania and Nigeria. Non Available. Big oil-producing countries have faced a double-hit in recent months: the sudden drop in prices of oil and the economic impact of the global pandemic. The informal economy is described as the sum total of economic activity that happens outside state regulation, which is neither taxed nor represented in a country's GDP. The panel discussion titled “Building the infrastructure to grow the informal sector in Nigeria” is timely and relevant being that the Nigerian Informal Sector is a major contributor to the Nigerian economy, accounting for a significant portion of employment and national GDP. But a group of countries in sub-Saharan Africa once designated as “prospective producers” are facing a different challenge. The Republic of Namibia has been praised for its containment of the spread of the coronavirus. To receive our NEW investment newsletter containing intelligent investing news, data, analysis and research, type in your e-mail address. In the quest for economic diversification from oil, the government has given priority to solid minerals and agricultural sectors. An empirical analysis of the rate of poverty and the decomposition of poverty status in the urban informal sector of Kwara State was carried out using a set of household data generated by the use of a structured questionnaire. The fuzzy boundaries and intertwined nature of informal and formal sectors in Nigeria has varied impact on the economy. Quarter on Quarter growth of the sector was recorded at –13.31%. On rail transportation contribution to the GDP, the informal sector made 0.0% contribution to the GDP in 2015, while the formal sector accounted for 100% of the GDP in the rail transport sector. The informal economy involves economic activities undertaken by individuals and organizations, which are not subject to full government regulations. Identifying the benefits that business expansion could create, she acquired a small loan early this year, and invested in a second stall at another market; it wasn’t long before she began to see returns on her investment. In the fourth story of our series on the impact of COVID-19 on Nigeria's economy, we look at why the country's neglected gas reserves need to form part of the energy reforms. The informal sector thus, constitutes the final destination of an ever increasing number of job seekers. What the border closures have resulted in is an increased need to look within our shores for the goods and services we require – from an individual and a business perspective; there are increased opportunities to create business linkages between the formal and informal sector. Available statistics in Nigeria also shows that the informal sector contributes about 60 per cent of the nation’s Gross Domestic Product (GDP). The economy of Nigeria is a middle-income, mixed economy and emerging market, with expanding manufacturing, financial, service, communications, technology and entertainment sectors. Inflation Rate to Drop Marginally to 11.01% in July 2018, 4. Unregistered household enterprises comprise a significant portion of Nigeria’s economy, accounting for as high as 65 percent of GDP, says the International Monetary Fund (IMF) in a blog article seen by businessamlive.. Like many other developing countries, the sector is considered crucial to job creation as it accounts for about 90 percent of jobs in the country. In fact, employment in Nigeria’s formal sector does not guarantee a break from extreme poverty. Nigeria’s Trade One significant revelation of this pandemic is the strength and importance of leveraging digital tools across the entire value chain: from financial transactions and services to customer service and beyond. Investment in Methods: This cross-sectional study adopted a multistage sampling method to select 279 respondents from three cities (Ibadan, Lagos and Aba) in Nigeria. The informal sector, in which more than 80 percent of Nigerians work, includes a wide range of occupations, from street traders, taxi drivers, tradesmen, and … Given Nigeria's poor infrastructure, informal market activities ease the cost of doing business. ** Urban Areas. The informal sector in Nigeria currently accounts for 35 percent of Gross Domestic Product (GDP) or $178.5 billion. The informal sector throughout West Africa, and particularly in Benin, represents approximately 50 percent of GDP (70 percent in Benin, in fact) and 90 percent of employment. In the case of Angola, which entered both crises with an already weakened economy, how are its prospects looking? However, one thing is certain: our micro-entrepreneurs and small businesses can become a harnessed economic force if we make the concerted efforts to empower them. As South Africa prepares for level 3 lockdown, unions are working around the clock to ensure companies comply with safety standards and regulations. With a total number of about 17.4 million, they account for about 50% of industrial jobs and nearly 90% of the manufacturing sector, in terms of number of enterprises. Manufacturing PMI Stands at 56.8% in July 2018 from 57.0% in June 2018, 6. It was the first decline in real non-oil GDP growth rate since Q3 2017. The study is restricted to the role of informal sector in unemployment reduction in Nigeria from 1980-2015 using Kano state as the case study. Unregistered household enterprises comprise a significant portion of Nigeria’s economy, accounting for as high as 65 percent of GDP, says the International Monetary Fund (IMF) in a blog article seen by businessamlive.. Watching From The Political Balcony - LBS Executive Breakfast Session – Aug 2018, 5. These efforts clearly require the collective contributions of our private sector and government stakeholders, and must be holistic and sustainable if they are to have the desired impact. The Africa Report speaks to Sergio Pugliese, the Executive President for the African Energy Chamber (AEC), to find out. OAuGF 2016 Audited Annual Report Submitted, Issues Qualified Report, 10. The recorded growth rate was –7.70% points lower compared to the rate recorded during the same quarter of 2019, and –7.60% points compared to the first quarter of 2020 SELECTED BANKING SECTOR STATISTICS (Q1 2015 – Q3 2016) 5: 10: 38: ... PETROLEUM PRODUCTS CONSUMPTION STATISTICS IN NIGERIA – (Q1 – Q3 2016) 5: 10: 35: ... GDP 2015 FORMAL AND INFORMAL SECTOR ESTIMATED SPLIT: 2: 6: 39: GPD, Report, … Like many other developing countries, the sector is considered crucial to job creation as it accounts for about 90 percent of jobs in the country. But progress is complicated by geopolitical rivalries between China and the United States as well as business interests. METHODS: This cross-sectional study adopted a multistage sampling method to select 279 respondents from three cities (Ibadan, Lagos and Aba) in Nigeria. If this were the case it would allow workers to maximize their profits and further ease their escape from the poverty trap. Sambo told News Agency of Nigeria (NAN) in Abuja that NHIS currently covered enrollees under its formal sector programmes and the voluntary social health insurance arrangement. Taxing the Informal Sector (IS) and its taxpayers’ compliance level has become a focus of attention in recent times by scholars and policy makers because of IS contribution to the country. This could draw actual power output closer to its potential pending the time the country sees other significant investments that could raise capacity. Maximizing gas availability could result in significant benefits, not just for the informal economy, but Nigeria as a whole. The informal sector in Nigeria refers to eco nomic activities in all sectors of the economy that are operated outside the purview of gov ernment regulation. The first strategy that is worth considering is the development of informal skills amongst Nigeria’s working-age population. This is as the Federal Government has been called upon to create enabling environment for private investors to grow the economy. As a result of these initiatives, we have been able to gain a better understanding of what these micro- and small businesses in the informal sector truly need: firstly, access; secondly, skills; and thirdly, tailored service delivery and channels of access. The size of the informal sector in Nigeria is estimated at about 65% and consists of activities that range from agricultural production to mining and quarrying, small-scale building and construction and machine-shop manufacturing. At times, even Nigerians with high formal education find employment in the informal economy when well- paid formal sector jobs are unavailable. Unemployment is rising, especially in the informal sector with many expected to lose their jobs temporarily. The formal sector added 49,587 jobs, 19 percent more than a year earlier and representing 26.5 percent of total new jobs. Akintoye, I.R(2006) “Enhancing the performance of the Informal Sector for the Economic Development of Nigeria: A Case Study of Lagos State” International Journal of Social Sciences, Vol. The fact is, our informal sector is too large and too fragile for a total lockdown to be effective – or practical – in the medium term. Lagos’ growing informal sector. Lagos- Mr. Segun Awolowo, the Chief Executive Officer of Nigeria Exports Promotion Council (NEPC) has said that Nigeria informal sector records at least N41 billion annually across the West African States. No Respite As The question then is to what extent can unemployment and poverty be reduced through the informal sector in Nigeria? Inflation Rate and Yields Movement, 16. Given the poor condition of power supply in the country, most of those who fall in the category of high users resort to generators. Ghana was the first sub-Saharan African country to ease restrictions when it lifted lockdown measures on 20 April. The informal sector created 144,651 jobs, down 66.3 percent from last year but still accounting for 77.3 percent share. The implementation of social protection programs to support workers, particularly those in the informal sector is crucial. The sector grew by 0.8% in 2017. Vulnerable to Exchange Rate Movements, Domestic Economy By downloading this PDF you agree to subscribe to The Africa Report Daily newsletter, Coronavirus: Nigeria’s varied responses to controlling COVID-19, Coronavirus: Food insecurity fallout from Nigeria’s lockdown, Social infrastructure investment, a development priority in Africa, enhanced innovation and increased private sector participation, Coronavirus: South Africa to rev economy by easing lockdown, create business linkages between the formal and informal sector, Coronavirus is triggering deep digital change in African fintech, Coronavirus: South Africa’s unions fight for essential workers’ safety, Post-coronavirus: More sorrow for Africa’s new oil and gas producers, Coronavirus: Namibia praised for containing the virus, Call to graduates during coronavirus: ‘Don’t forget how you stayed connected’, Nigeria VS Coronavirus: Gas could be saving grace over crashing oil, Coronavirus: ‘People’s vaccine’ campaigners claim victory at WHO summit, Coronavirus: Reforms by Angola’s Lourenço helped mitigate effects of COVID-19, Ghana: Debt repayments greater than health or education spending. With regards to informal economic activities, the government plans to empower 100,000 artisans across the country. The National Bureau of Statistics has released its 2015 GDP report by formal and informal sector revealing that the informal sector’s share of the Nigerian economy is about 41.1%. Nigeria: Over 60% of World's Employed Population Are in Informal Economy - ILO. Nigeria’s population is said to have reached about 167 million people in 2012 (National Bureau of Statistics). of Payments but Vulnerable, Weekly Economic Downloadable! Taxing the Informal Sector (IS) and its taxpayers’ compliance level has become a focus of attention in recent times by scholars and policy makers because of IS contribution to the country. Nigeria might need to tilt towards an informal driven economy to create more employment and significantly reduce poverty. This puts Nigeria in a class of its own as the United Nations assessments suggest that for developing economies the average percentage composition of GDP by informal sector ought to be 41% and for countries in transition; 38%. Therefore, this study assessed the prevalence, patterns and factors associated with occupational injuries among e-waste workers in the informal sector in Nigeria. Tomorrow’s business world looks radically different from today’s. According to the IMF, the Nigerian informal sector accounted for ~65% of Nigeria… The big size of this economy, the in-evitable demand for their goods and services and the ease attached to working therein, could be a strategic consideration for Nigeria to raise employment. The formal sector of the economy, which represents the aggregate output, grew by 0.8% in 2017.5 This weak growth might not be enough to reduce poverty levels in the country. In the meantime, the government could focus on securing an adequate supply of gas to power stations. Such activities include photography, catering, hairdressing, motorcycle services, tailoring, fashion designing, carpentry, painting, etc. The structure of Nigeria’s informal economy. The sector is vast and encompasses a host of activities, ranging from agriculture and food production to mining, trade, transportation, accommodation, and even recreation services, amongst many others. 2 May 2018. The adverse implications of the COVID-19 pandemic on Nigeria’s vulnerable population in a complex development setting calls for concerted action to simultaneously mitigate the health and socio-economic implications. Box 18782, Ikeja, Lagos, Nigeria. Private sector, businesses in Nigeria should tap into AfCFTA treaty ― Osinbajo On November 27, 2020 12:00 am In News by Temisan Amoye Kindly Share This Story: This was an improvement from the rate of poverty in 2018 (which was at nearly 50%, an estimated 86.9m people), and yet, as the informal sector remains incapacitated, the ripple effect will eventually lead more people to regress into abject poverty, undoing much of the progress that may have been made in recent years. of people who look to the informal sector for economic survival. Today, however, since the government imposed lockdown and restricted movement measures across the country, demand for her products (for which she had relied on foot traffic) has come to a complete standstill and restocking any previously sold stock is proving difficult and more expensive. Available statistics in Nigeria also shows that the informal sector contributes about 60 per cent of the nation’s Gross Domestic Product (GDP). READ MORE Social infrastructure investment, a development priority in Africa. In its efforts to increase its internally generated revenue and to be less dependent from dwindling federal resources, the Government of Lagos made several unsuccessful attempts to tax small business owners in the informal sector, writes Adeolu Adesanya. This part of the economy is particularly large in Nigeria, with the International Monetary Fund (IMF) estimating it to constitute about 60% of the entire Nigerian economy.3 This represents about $240bn. and Financial Commentary – WE 13th July 2018, 15. The Nigerian economy added 187,226 new jobs in the third quarter of 2016 after adding 475,180 a year earlier. Expected Drop in This sector may be invisible, irregular, parallel, non-structured, backyard, under ground, subterranean, unobserved or residual (Magbagbeola, 1996). Available statistics in Nigeria also shows that the informal sector contributes about 60 per cent of the nation’s Gross Domestic Product (GDP). It’s through a participatory approach that the Government finally succeeded in integrating the informal sector into its taxation system. In Nigeria today the informal sector employs majority of youths especially women but the official statistical apparatus still does not gather systematic data on the informal economy. Activities such as transport services generally have marginal electricity demand. These are the individuals and micro-enterprises whose economic well-being is birthed and buoyed on the fringes of the formal economy; business activities that remain unregulated, and oftentimes, completely unknown. But as states learn to live with this new reality, they must also create policies to minimise the economic impact this crisis will undoubtedly bring. 1 Six cities. The sector currently offers a minimum wage of N18,000 ($50), which translates to an average daily income of $1.67, still below the poverty threshold of $1.9 per day. READ MORE Coronavirus: South Africa to rev economy by easing lockdown. In 1995, employment in sub-Saharan informal sector … In Lagos state alone, the informal economy employs about 5.5 million people – about three-quarters of the state’s 7.5 million labour force. In sub-Saharan Africa, the informal sector contributes about 72 percent to employment, excluding agriculture. IS seems difficult to tax because of administrative problems, human capital and personnel shortage, lack of record keeping, nature of its economic activities and cost implications. Its index case came mid-March, but for 45 days (7 April to 21 May) no new cases were recorded. Notes: Due to the possible existence of some formal wage employment in the informal sector, total informal employment may be slightly lower than the sum of informal sector employment and informal employment outside the informal sector. Also, the informal sector contributes 80 percent of the labour force in Africa. A few weeks ago, the National Bureau of Statistics released a report which revealed that 4 in 10 Nigerians currently live below the poverty line – an estimated 41% of the population (82.9m individuals). Series: Working Paper No. According to Magbagbeola (1996), the informal sector in Nigeria refers to economic activities in all sectors of the economy that are operated outside the purview of government regulation. Strategies to spur informal economic growth. This new normal has affected every industry in Nigeria. Weekly Economic and Financial Commentary – WE 20th July, 2018, 13. The study developed the appropriate theoretical framework for the discourse. Employment Rate in Nigeria averaged 85.42 percent from 2014 until 2018, reaching an all time high of 93.60 percent in the fourth quarter of 2014 and a record low of 76.90 percent in the third quarter of 2018. Nigeria: Mid-Year Economic Review By Biodun Adedipe Associates, 8. THE SIZE OF INFORMAL SECTOR • The size of informal sector is estimated to be around R157bn (1US$=R7) – 2,5 times the entire size of the agricultural sector – 70% of the mining sector • Trade sector is the largest sub-sector with over 1 million people engaged in this activity • Another 300 000 are engaged in community and social services The Nigerian economy added 187,226 new jobs in the third quarter of 2016 after adding 475,180 a year earlier. - Lingering Negative Output Gaps, 18. The same approach has been adopted on the Tradermoni and Marketmoni initiatives of the Federal Government of Nigeria, being executed by the Bank of Industry. In addition to skill acquisition, workers in Nigeria’s informal economy have raised concerns over credit accessibility. economic activities outside the regulatory framework of government, that is, the informal sector. Nigeria’s informal economy has grown considerably over the last decade. The country’s Minister of Finance Ken Ofori-Atta argued the 21-day lockdown of Ghana’s biggest cities had become financially unbearable for most of the population, a concern that gave the government little choice but to lift the restriction. Nominal GDP growth of the Manufacturing sector in the second quarter of 2020 was recorded at –0.14% (year-on-year), or -37.92% points lower than figures recorded in the corresponding period of 2019 (37.79%) and –28.61% points lower than the preceding quarter’s figure of 28.47%. Research shows that, the growth of the informal sector may … More attention is required. Complete the form for your free download of The Africa Report’s special feature "The top 50 Disruptors". - Lingering Negative Output Gaps, Nigeria’s Trade The economy of Nigeria is a middle-income, mixed economy and emerging market, with expanding manufacturing, financial, service, communications, technology and entertainment sectors. The study found the informal economy significantly expanding in Nigeria. In South Africa, the government has launched a Debt Relief Fund to help small businesses; this is not dissimilar to the $136m credit relief fund set up by the Central Bank of Nigeria, which is also designed to support small businesses affected by the pandemic. The country officially overtook India which has 73million of its population living in poverty. So our efforts must shift quickly and concertedly towards encouraging and enabling the safe operation of our informal sector through this pandemic – as we await the discovery of a cure and vaccine. Nationally, the value of the sector is said to be worth N38.7trn, going by a 2016 estimate. Informal activities are usually not captured in the process of computing GDP numbers. It is imperative for actors in our informal sector to understand the measures required to protect themselves and their customer bases, and have increased access to these measures and tools – i.e. READ MORE Coronavirus is triggering deep digital change in African fintech. In Lagos state alone, the informal economy employs about 5.5 million people – about three-quarters of the state’s 7.5 million labour force. Human Capital Remains Key to Unlocking Nigeria’s Economy, No Respite As The ongoing worldwide pandemic has enlightened people on the need to be financially stable and successful, especially in a 3rd world country like Nigeria. The informal sector consists of micro, small and medium scale enterprises including traders and artisans and constitutes a significant portion of the Nigerian economy. Including agriculture should put figures at around 90 percent. The informal sector constitutes over 40% of the Nigeria Economy and is estimated to grow more. In less than two months, Salewa’s household has become a single-income household. The fuzzy boundaries and intertwined nature of informal and formal sectors in Nigeria has varied impact on the economy. Wake up to the essential with the Editor's picks. Get your free PDF by completing the following form. In the wake of COVID-19, the intensity, the approach, the quantity and quality of our participation will need to be accelerated, refined, and expanded. 5 No 1, pp 100112 Berger and Byvinie (2003) ” Nature and determinants of the linkages between informal and formal sector enterprises in Nigeria”. DON'T MISS : Talking Africa New Podcast – Nigeria's Toyin Sanni on investing without a safety net, Executive Director of Micro Enterprises, Bank of Industry, Nigeria. The public sector lost 7,012 jobs. 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informal sector statistics in nigeria

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