- The informal sector report 2024 by Jobberman highlights strengths, weaknesses, and promises of Nigeria's informal sector
- Nigeria's informal sector contributes significantly to the economy
- Agriculture remains the backbone of Nigeria's economy, employing over 36% of the labor force
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The informal sector report 2024 recently released by Jobberman highlights the contribution of the country's informal sector as four sectors emerge the highest employers of labour. The report further provides an in-depth analysis of Nigeria's informal sector, showcasing its strengths, weaknesses, and potential.
The informal sector includes businesses under the categories - Fashion, Crop production, mobile money, food and catering, handwork, artisans, and agro-processing. According to the report, the sector contributes to 50% of household income in Nigeria, 90% of all jobs, 80% of employment in the agricultural sector and is a source of jobs for 90% of females.
Nigerians from the informal sector were sampled from three locations in the northern part of the country - Abuja, Kaduna and Kano states, while the southern states sampled included Lagos, Oyo and Ogun states.
According to a UNDP report, over 80% of all employment in Africa and 85% in Sub-Saharan Africa is informal. Poverty remains one of the most significant trends driving the expansion of informal enterprises and workers. According to the National Bureau of Statistics, (NBS) over 100 million Nigerians are multi-dimensionally poor, and about 43.7 million women are living in extreme poverty.
The influence of the informal sector in Nigeria's employment figures was felt as the unemployment rate dropped to 4% in 2023. as reported by the NBS. During the period, there was a concomitant 76% rise in employment.
Four major sectors from the report emerged as the top industries with the highest contribution to employed labour in Nigeria and they include:
Agriculture
Agriculture remains the backbone of Nigeria's economy, providing employment opportunities for over 36% of the labour force and supporting 70% of Nigerian households.
Despite its significance, the agricultural sector is largely dominated by smallholder farmers, who make up about 80% of the agricultural labour force and contribute an impressive 90% of the country's agricultural output.
The Creative Industry
The Nigerian creative sector includes categories like food and catering services, fashion and beauty, lifestyle, skit making and hospitality.
The sector has hugely impacted employment contributing about 4 million jobs, making it the second-largest employer of labor in the country. However, despite its growth, the sector's urban activities remain largely unregulated, leaving workers in informal employment situations without defined benefits or protections.
Digital Sector
This includes the numerous tech start-ups springing up across the country and the mobile POS vendors.
The digital sector currently ranks as the third-largest employer of labour and demonstrates rapid growth in GDP contribution and job creation.
With over 2.5 million jobs created in the last decade, the sector continues to expand, driven by the increasing demand for tech-enabled roles. The financial industry has been one of the most influenced by the digital sector with over 1.3 million registered retail merchants' point-of-sale devices (POS) agents existing. This emergence of a rapidly growing and highly competitive fintech ecosystem has created a unique opportunity for young people.
Artisans
Nigeria's construction industry with a market size estimated between $26.9 billion and $40.3 billion, is a significant contributor to the economy. It also accounts for approximately 9% of the country's GDP. However, there is an urgent need for a substantial increase in the workforce, requiring an additional 10 million skilled artisans in the next 20 years to bridge the gap and address the housing shortage.
The shortage has led to a heavy reliance on foreign artisans such as masons, iron benders, tillers, plaster of Paris installers, electricians, AC repairers, interior decorators, carpenters, and plumbers from neighboring countries.
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