Many states have Small Scale Credit Schemes which provide SMEs with financial and technical support. This sector may be invisible, irregular, parallel, non-structured, backyard, under ground, subterranean, unobserved or residual (Magbagbeola, 1996). About us | | In order to mobilise savings in local communities to finance the infor mal sector, the Community Bank scheme was also introduced in the late 1980s. The informal sector in Nigeria has no tendency to wither; it must be sustained for optimum contribution to the growth of the economy. The informal sector consists of micro, small and medium scale enterprises including traders and artisans and constitutes a significant portion of the Nigerian economy. 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. The informal sector consists of micro, small and medium scale enterprises including traders and artisans and constitutes a significant portion of the Nigerian economy. To encourage the participation of the banks in the scheme, Government granted them certain fiscal incentives. - Source: GettyImages Solid waste management is an important public health service because it helps to prevent the transmission of disease. 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 … 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%. Adebakin pointed out that the company had the capacity to export 100,000 cargo out of Nigeria regularly and hoped its partners across the world had the facilities to accommodate such huge amount of cargo. There has been a lot of focus on the fact that Nigeria's tax to GDP ratio of about 6.1% is quite low and appears to remain unchanged despite all the efforts of the tax authorities to improve collection. Some Esusu groups operate with written laws while others operate with unwritten laws but on oath of allegiance and mutual trust. Nigeria: Informal Sector Growth Threatens Decent Work Agenda, Says ILO. 6 months ago. An unpublished survey in 2008 suggested that the informal sector in Nigeria accounted for about 90% of new jobs in the country, about 80% of all non-agricultural employment and about 60% of urban jobs created, earning it the description of being the backbone of the formal sector. Tweet. However, with the introduction of the Structural Adjust ment Programme and the deregulation of the banking sector, interest rates and sectoral allocation of loans have become increasingly market deter mined. 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. NUJ Asks Rights Commission To Establish Offices At LG Levels, Bishop Counsels Influential Personalities On Act Of Giving Back To Society. Nigeria is the largest country in Africa, and the largest concentration of black people in the world — with a land area of close to 1 million square kilometers, and a population of well over 125 million. The scheme was designed to promote the development of technology based SMEs in Nigeria. This sector may be invisible, irregular, parallel, non-structured, backyard, under ground, subterranean, unobserved or residual (Magbagbeola, 1996). Money lenders are believed to be highly exploitative with high rates of interest through which they extract economic surplus provided by peasant labour, capital and land. Others include such financial and economic endeavours of subsistence nature as: retail trade, transport, restaurant, repair services, financial inter-mediation and household or other personal services (Adamu, 1996). He specifically said that agricultural products are taken out of the country by different business organisations, but regretted that most of these were informal. 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. In Nigeria, there are also informal money lenders, saving and credit associations and credit unions. Credit Unions are the precursors of the People's Bank. The Federal Government in the late 1980s initiated the Entrepreneurship Develop ment Programme (EDP) run by the National Directorate of Employment (NDE). Also commenting, Mrs. Olatokunbo Fagbemi, the Group Managing Director, NAHCO, informed that the ground handling company serves 36 airlines, 16 airports, while its market share stands at 59 per cent. Adebakin appealed to NAHCO and its foreign countries to provide adequate warehousing facilities to accommodate cargo from Nigeria. The union lamented the impact of the incessant hike of fuel pump prices on Nigerians, especially the workers in the informal sector, noting that the … The programme is intended to harness the potentials in the local areas to establish viable enterpris es and projects that would ensure eco nomic empowerment of the rural and urban poor. EXPOSED - HOW LAGOS DOCTOR DISCOVERED MAJOR REASONS WHY MOST WIVES NOW HEAVILY CHEATS ON THEIR HUSBANDS AND THE PERMANENT SECRET TO SEXUALLY SATISFYING THEIR WIVES. He, however, said that the government was aware of this movement, but liberalized the market to allow Small and Medium Scale Enterprises (SMEs) to thrive. 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. (b) International Financial Assistance: International organisations such as African Development Bank (ADB), World Bank and the United Nations Development Programme (UNDP) have also supported efforts to aid the informal sector. A tax exemption on interest income received on loans granted under the scheme was one of such incentives. (vi) Helps in the mobilisation of capital and human resources which would other wise have been laid waste and idle thereby increasing the utilisation of virgin reuseable materials. He said: “Many of the cargo aircraft that come into Nigeria have nothing to take out of the country, yet, there are lots of cargo opportunities in Nigeria especially in the area of agricultural produce. DON'T BE A VICTIM! The government must encourage and empower the informal sector through the provision of conducive policy and physical conditions. They include agricul tural production, mining and quarrying (excluding petroleum), small-scale man ufacturing, building and construction. Fagbemi stated that NAHCO had invested in state-of-the-art Ground Support Equipment (GSE) and other facilities in order to support their clients across the world. 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 … Archive | Take the CBN's cashless policy. 3. According to the International Labour Organisation, in Nigeria, over 80 percent of working people are employed in the informal sector. In Volume 02 Issue 02. The fuzzy boundaries and intertwined nature of informal and formal sectors in Nigeria has varied impact on the economy. 2013: 32). Government has no need in business, but should just provide the enabling environment for private investors to grow.”. informal sector in Nigeria, and policy responses to the informal sector. African taxmen are in Nigeria strategizing on taxation of informal sector. The fuzzy boundaries and intertwined nature of informal and formal sectors in Nigeria has varied impact on the economy. The Informal Sector and Taxation in Nigeria. 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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. 15 May 2018. The aim is to gather information that aid in basic understanding of the informal sector and its role in output and employment in a developing economy. The informal sector contributes significantly to national economy in terms of output and employment. In the late 1980s, the Federal Ministry of Industry supported efforts by the states to build functional industrial estates for SMEs by way of partial reimbursement of money actually spent on the provision of industrial estates for SMEs. Federation of Informal Workers’ Organization of Nigeria (FIWON) has said the COVID-19 pandemic has further exposed the vulnerability of workers in the informal sector to many health risks. The Guardian (Lagos) By Gloria Ehiaghe. He explained that the agency was collaborating with State governments to develop at least one agricultural produce in their state for exportation purpose. Informal economic activities in Nigeria encompass a wide range of small-scale, largely self-employment activities. The State Governments have also been involved in providing support to SMEs. The affected lockdown states include three of the most urbanised states in Nigeria, signifying that the impact of the lockdown would be skewed toward those who perform urban informal sector economic activities. This is as the Federal Government has been called upon to create enabling environment for private investors to grow the economy. The Informal sector, which is the focus of this paper is also known as the “grey economy”. The IMFblog chat entitled: The Potential for Growth and Africa’s informal Economy, indicates that by 2035, sub … This is as the Federal Government has been called upon to create enabling environment for private investors to grow the economy. Nigeria is an elephant among the Economic and West African States (ECOWAS) and a lion in Africa with our population of over 200 million people. With a pervasive informal sector, city governments have been struggling with how best to respond to the COVID-19 pandemic. While it has its merits, it runs the risk of making business harder for informal economy agents. Moreover, through linkages with large-scale enterprises, informal sector enterprises have the production base of the economy. The structure of Nigeria’s informal economy The informal economy involves economic activities undertaken by individuals and organizations, which are not subject to full government regulations. ROLE OF INFORMAL SECTOR IN EMPLOYMENT GENERATION IN NIGERIA CHAPTER ONE INTRODUCTION 1.1 Background to the study. Definition. They may or may not be registered under any legislation. Speaking at an event organised by the Free On Board (FOB) Global Logistics in collaboration between NEPC, Nigerian Aviation Handling Company (NAHCO) Plc assist private and technical partners from United Kingdom Europe, India, Kuwait, United States and China in Lagos, Awolowo said that Nigerian products are exported across the West African countries. Such activities include photography, catering, hairdressing, motorcycle services, tailoring, fashion designing, carpentry, painting, etc. The Federal Government, in response to this, has continued to provide support for the informal sector by programmes designed to enhance the access of SMEs to credit and the availability of credit. The informal sector thus, constitutes the final destination of an ever increasing number of job seekers. According to the International Labour Organisation, in Nigeria, over 80 percent of working people are employed in the informal sector. Independent Newspapers - Breaking news from Nigeria and the World, Kaduna State Fire Service Records 115 Fire Outbreaks, 25 Deaths In Two Months, Federal Teachers Scheme: Oyo Govt. What are these infrastructures and how best can this sector be supported? The informal sector in Nigeria may be cate gorised into the following sub-sectors:- (i) Produc tive; (ii) Service; and (iii) Financial. 4 years ago. The informal sector refers to the part of the economy … According to the IMF, the Nigerian informal sector accounted for ~65% of Nigeria’s 2017 GDP. Nigeria’s informal economy accounts for 65% of GDP – IMF. Research shows that, the growth of the informal sector may … 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. The Nigerian government at various levels, has adopted policies aimed at enhancing the per formance of the informal sector. Over the past years, scholars have debated on whether the informal sector should really be seen as a marginalized sector, which mops up excess or entrenched workers or as a vibrant, entrepreneurial part of the Nigeria economy which can stimulate economic … The position of the Federation of Informal Workers’ Organisations of Nigeria, FIWON, is that government should complement informal sector workers’ contributions at … The general practice is that esusu associations contribute a fixed amount periodically and give all or part of the accumulated funds to one or more member(s) in rotation until all members have benefited from the pool. So governments find it difficult bringing taxpayers to the tax net. 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 1995, employment in sub-Saharan informal sector … 7726. Between 1990 and 1994, Africa’s urban employment was put at ten (10) percent but employment in the sub-Saharan informal sector was 6.7 percent. Among the Yoruba, it is called either Esusu or Ajo. Under this policy, the Federal Ministry of Labour sought to address the gra duate unemployment problem through the NDE programme which provided participants with the opportunity to acquire entrepreneurial skills and secure loan capital to enable them establish and operate their own small scale enterprises. Contact us | | According to Awolowo, NEPC evolve a programme, ‘one state, one product; in which no fewer than 22 products from the country had been identified for exportation. Government policies are dominated by interest in the formal sector, although women are to be found in far greater number in agriculture, non-farm enterprises and the informal sector. The Hausa call it Adashi', the Nupe Dashi, the Ibibio Etibe, while the Kalahari call it Oku (Okorie and Miller, 1976). The Informal Sector … 3. by Genevieve Henshaw. 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. (c) Family Economic Advancement Programme: The Family Economic Advancement Programme (FEAP) was initiated in 1997 as a catalyst to stimu late and encourage the growth of the informal sector. To this end, the Ministry established Industrial Develop ment Centres in various parts of the country with the mandate to: (i) promote small-scale enterprises through the provision of exten sion services; (v) render, free of charge, technical and managerial services includ ing advice on quality control, product improvement, etc. Comments | There are also traditional spiritualists who offer counselling services. Mr Kabir Yagboyaju, FMBN Head of Loans Production, told the News Agency of Nigeria … Loans under the World Bank - Nigeria Small and Medium-Scale Enterprises development programme provide financial and technical assis tance to these groups of entrepreneurs. The affected lockdown states include three of the most urbanised states in Nigeria, signifying that the impact of the lockdown would be skewed toward those who perform urban informal sector economic activities. Repairs and maintenance services include tai loring, vehicle repairs and maintenance, tinkering, carpentry and servicing of var ious household and commercial tools. Nigeria Informal Sector Records N41bn Across West Africa Annually– NEPC. OnlineNigeria.com 1998 - document.write(new Date().getFullYear()) © All rights reserved. This is worth about N41 billion annually. According to the IMF, the Nigerian informal sector accounted for 65% of Nigeria’s 2017 GDP. Most of them are traditional occupations and methods of production. Latest Nigeria Articles | by Milcah Lukhanyu. Crossref Esther K. Ishengoma, Robert Kappel, Business Environment and Growth Potential of Micro and Small Manufacturing Enterprises in Uganda, African Development Review, 10.1111/j.1467 … This is as the Federal Government has been called upon to create enabling environment for private investors to grow the economy. These services are rendered for fees paid to those who render them. 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. 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. 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. (ii) Informal Service Sub-sector: This sub-sector includes repairs and mainte nance, informal education services, health services, counselling services as well as labour for menial work. Home | | For instance, policies have variously been designed to promote small and medium scale enterprises. He lamented that many of the cargo aircraft that import goods into the country return empty, but said the government was ready to change the situation by partnering with private investors to develop the economy. (i) The Informal Productive Sub-sector: This sub-sector encompasses all eco nomic activities involving the production of tangible goods. Various reports over the past few years have surmised that the sector, which accounts for over half of global employment, could be worth approximately N40 trillion in Nigeria. Akeem Ayofe Akinwale, The Informal Sector as a Catalyst for Employment Generation in Lagos State, Nigeria, African and Asian Studies, 10.1163/15692108-12341236, 11, 3, (315-344), (2012). 8 min read 0. This objective could not be realised essentially because of the man agement style of the Abacha regime. The saving and credit associations as well as credit unions operate in more formalised ways than the esusu associa tions. Speaking at an […] The informal sector plays a key role in the economic structure of many developing countries, especially Nigeria. SMEs, therefore, no longer ben efit from preferential monetary policies. 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. 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.. Agencies, Others To Launch First Contact…, Sasakawa Association Partners KNSG To support 550,000 Farmers, NBBF President Laments 3-Year Absence Of Men’s Premier League, Mino Raiola Fires Dig At Solskjaer Over Haaland, PSG Announce 23-Man Squad For Istanbul Basaksehir Clash, Reality Meets Catwalk As Naomi Campbell Leads Arise Fashion Week 2020, BON Awards: ‘Living In Bondage’, ‘This Lady Called Life’ Win Big, Celebrating Former Believing Editor’s Legacy, Energy Trends Of The Future: The Nigerian Direction, Border Closure: Sabo Nanono’s Strange Option. The informal sector arguably constitutes the largest employer of labor in Africa. The "Work for Yourself Programme" (WFYP), a scheme introduced by the Federal Ministry of Industry and assisted by the International Labour Organisation (ILO) and the British Council, which aims to develop entrepreneurial skills in the sector, is one of such schemes being implemented with international assistance. Informal health services, especially in the rural areas, include traditional birth attendants, herbalists and other tradi tional medical practitioners. (d) Monetary Policies: The monetary authorities prior to the introduction of the Structureal Adjustment Programme, directly managed and determined inter est rates and sectoral allocation of cred it by the banking sector. This generally, at least in theory, was favourable to SMEs since the interest rates were rela tively low and stable. "The informal economy really is the backbone of the Nigerian economy. The Federal Mortgage Bank of Nigeria (FMBN) said on Monday that the informal sector had the opportunity of accessing estate development loans through the National Housing Fund (NHF). A study released in 2016 revealed that the informal sector made 41 per cent of contributions to Nigeria's national GDP; a few years later, in 2018, this portion had risen to 65 per cent. So what is the informal sector? Informal sector constitutes a significant segment of the Nigerian economy. Also, Mr. Oluwajimi Adebakin, Managing Director, FOB, said that the company was willing to collaborate with private organisations in order to develop export out of the country. The most predominant type of informal finance in Nigeria is the Esusu. PEAP is one of the programmes which the Obasanjo Administration intends to abolish as part of its restructuring of the institutional framework for the support of SMEs. Activities in the informal sector in Nigeria are difficult to measure; they are highly dynamic and contribute substantially to the general growth of the economy and personal or household income. “All across ECOWAS, we see our products going out of the country, even though, in informal ways. The informal sector thus, constitutes the final destination of an ever increasing number of job seekers. The informal sector constitutes over 40% of the Nigeria Economy and is estimated to grow more. 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 mass of economic activities can be categorized into formal and informal sectors. Among the lgbo, it is called lsusu or Utu while the Edo call it Osusu. In other cases, the Federal or State Governments, as the case may be, co-finance small-scale businesses which benefit from external financial assistance. The government is aware of this, but decided to look the other way around in order to allow indigenous business to thrive.”. Some of the policies include the following: (a) Entrepreneurship Development Policy: Over the years, the Federal and State gov ernments have played significant roles in entrepreneurship development. A study released in 2016 revealed that the … Thus the People's Bank and FEAP were established essentially to service the credit needs of the informal sector. How to bring the informal sector into the tax net is a headache to African tax administrators. 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. Some of the 22 products the agency was working on to export to Europe, Asia, America, Middle East and Africa included cocoa, cashew, plantain, cassava, orange, leather, banana, garment, ginger, shea butter, sesame seed, cow pea and spices among others. All Rights Reserved. The sector thereby contributes to the Gross Domestic Product (GDP) and employment and contributes significantly to economic development of Nigeria in general (Omisakin,1999) cited in (Atah et al. Of GDP – IMF accounted for 65 % of total employment in African. This paper is also known as the Federal government has been called upon to create enabling environment for investors! Tional medical practitioners also informal money lenders, saving and credit unions involved in providing support to agricultural. Years, NAHCO group had grown its investments by diversifying into various businesses, Says.. To grow more which provide SMEs with financial and technical assis tance to these groups of.! 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