\n A new Informal Economy Report 2025 reveals that over 40% of informal businesses in Nigeria make less than $12 in daily revenue, painting a vivid picture of resilience amid rising economic hardship.\n <\/p>\n
\n Despite contributing roughly 65% of the country\u2019s GDP and employing more than 80% of its workforce, the sector\u2019s fragility remains exposed.\n <\/p>\n
\n \u201cThe informal economy is Nigeria\u2019s silent engine, but one that\u2019s running on fumes,\u201d the report noted.\n <\/p>\n
A young but struggling workforce<\/p>\n
<\/p>\n
\n The report identifies the informal economy as overwhelmingly young, with 38% of businesses run by entrepreneurs aged between 18 and 34.\n <\/p>\n
\n Many of these youth-led ventures are small, often family-operated, and locked in a cycle of survival. Only 40% of these businesses have employees, underscoring their micro-scale nature.\n <\/p>\n
\n Retail and general trade dominate the space, accounting for 44% of informal activity, followed by agriculture and creative services. Yet, beneath this industrious energy lies a harsh truth: most of these enterprises barely stay afloat.\n <\/p>\n
\n \u201cInformality provides jobs but not prosperity. Without access to finance, basic infrastructure, and supportive regulation, young entrepreneurs remain trapped in low-income activities,\u201d the report emphasised.\n <\/p>\n
Profitability gap and gender divide<\/p>\n
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\n While revenues for many businesses have grown in nominal terms, profitability continues to lag. Inflation, volatile exchange rates, and rising supplier costs have eaten deep into earnings.\n <\/p>\n
\n The report found that 41% of women-owned businesses earn less than $6 in daily profit, compared to 34% of male-owned businesses.\n <\/p>\n
\n This gendered income gap reflects not just market realities but structural inequities in access to credit and resources.\n <\/p>\n
\n \u201cWomen dominate informal trading and services,\u201d the report noted, \u201cbut they face systemic barriers, from limited financial literacy to societal expectations, that stifle their ability to expand.\u201d\n <\/p>\n
High costs, low support<\/p>\n
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\n The Informal Economy Report 2025 paints a stark picture of Nigeria\u2019s rising cost of doing business.\n <\/p>\n
\n A staggering 79% of respondents said their operating costs surged in the past year, driven largely by inflation, higher transport expenses, and supplier price hikes.\n <\/p>\n
\n Meanwhile, multiple layers of taxation from federal, state, and local authorities continue to discourage formalisation.\n <\/p>\n
\n \u201cEntrepreneurs perceive registration as a tax trap rather than a growth opportunity,\u201d the report explained.\n <\/p>\n
\n \u201cFormalisation remains unattractive when it brings more costs than benefits.\u201d\n <\/p>\n
Digital divide in a cash-first economy<\/p>\n
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\n Despite Nigeria\u2019s rapid fintech expansion, cash remains king in the informal market. One in four informal businesses reported that less than 10% of their transactions are digital, highlighting a significant gap in adoption.\n <\/p>\n
\n While many businesses now use bank transfers to buy supplies, few use point-of-sale systems or mobile apps for customer payments. The reasons range from transaction fees and poor connectivity to distrust of digital systems.\n <\/p>\n
\n \u201cThis digital exclusion limits efficiency and record-keeping,\u201d the report stated.\n <\/p>\n
\n \u201cBridging this divide is essential to integrating informal businesses into Africa\u2019s growing digital economy.\u201d\n <\/p>\n
\n But the transition remains slow. Many entrepreneurs associate formalisation with red tape, not opportunity.\n <\/p>\n
\n \u201cUntil registration brings visible benefits, like access to loans, training, or government support, most informal operators will stay where they are,\u201d the report warned.\n <\/p>\n
Unlocking potential through inclusion and support<\/p>\n
<\/p>\n
\n Despite the challenges, experts say the informal sector represents one of Africa\u2019s greatest economic opportunities.\n <\/p>\n
\n \u201cEmpowering women entrepreneurs through tailored financial products and digital literacy programmes is essential for shared prosperity,\u201d the report urged.\n <\/p>\n
\n Nigeria\u2019s informal economy mirrors a continental reality. Across Africa, more than 85% of jobs exist in the informal space, from Kenya\u2019s jua kali artisans to Ghana\u2019s market women and South Africa\u2019s township traders.\n <\/p>\n
\n The barriers, limited capital, regulatory friction, and gender disparity are shared challenges requiring coordinated solutions.\n <\/p>\n
\n \u201cThe fate of Africa\u2019s informal sector will define its economic future. With the right policies, what is today a survival mechanism can become tomorrow\u2019s engine of inclusive growth,\u201d the report concluded\n <\/p>\n","protected":false},"excerpt":{"rendered":"A new Informal Economy Report 2025 reveals that over 40% of informal businesses in Nigeria make less than…\n","protected":false},"author":2,"featured_media":103241,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,85,46],"class_list":["post-103240","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-il","tag-israel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/103240","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=103240"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/103240\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/103241"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=103240"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=103240"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=103240"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}