More facts have emerged on why the Nigerian previously booming informal sector is facing serious squeeze.
Investigations by Business Hilights Intelligence Unit showed that the slow performance of the sector stemmed from the onset of recession due to poor access to funding, weak encouraging government policies for the segment and taxation.
According to Saheed Adeolu, a development economist, “Strongest economies in the world are mindful of the imports of the informal sector and always introduce policies that drive its growth. “But what we have here are mainly policies that are formal sector-centered, thus relegating the informal sector at the background. The informal sector is always remembered in times of tax raids and demolition of illegal structures,” Adeolu decried.
Continuing, Adeolu noted that “If oil prices had failed to rise marginally within the second and third quarters of this year, Nigeria would still be in recession.”
“In other parts of the world where recession had come and gone, it was the performance of the informal sector that always does the magic of exit and not sales from natural resources like oil.
In his submission, he called on the government policy makers to always consider the interest of millions of Nigerians who eke out their daily living from their activities that are graded informal.
In his lecture at the 10th inaugural lecture series of Covenant University, Ota, Ogun State, Professor of Economics, Department of Economics and Development Studies of the institution, Isaiah Olurinola, charged the Federal and State government to develop operational policy framework that would reposition the informal sector for economic prosperity.
Presenting a paper titled “A Ladder Out of Poverty or A Cul-De-Sac? Repositioning the Informal Economy for Employment Creation and Entrepreneurial Development in Nigeria,” he said the informal sector like a pink elephant in the room is too big to miss and also too big to confront, thus the government, educational and research institutions must collaborate in this regard.
According to him, a healthy policy actions that will advance the sector is imperative, since research has proved that the sector has the potential to increase employment and output remarkably if properly nurtured and cultivated.
Continuing, the don revealed that “The study of the informal economy is growing. More work is needed as the sector is vast and expanding, especially in the developing economies of the world. The sector has proved to be a major employer of labour, not only for those displaced in the informal sector, but also for some persons who recognised the opportunities that the sector offers. We have seen that for many of the informal sector workers who are in the own-account, employer and employee categories, their reported earnings are a multiple of the national minimum wage.
“The earnings vary directly with the level of and quality of skills, formal educational attainment and on the job experience. For now, there appears to be a breakdown of mutual trust and confidence between the government and Informal Sector Actors (ISA) and unless this confidence gap is bridged, informal sector development will be a mirage. When the government makes it a duty to befriend and woo the ISAs, then the sector will respond with the generation of decent employment, quality output and robust tax revenues,” Prof Olurinola submitted.
