Businesses in Nigeria’s informal market, encompassing around 40 million small enterprises, contribute over half of the country’s Gross Domestic Product (GDP), according to a recent 2024 Informal Economy Report, powered by nine-year-old Nigerian payment startup Moniepoint. The report highlights that informal business owners are predominantly young, with most between 25-34 years old, and 89% of these businesses pay some form of taxes.The primary motivation for starting an informal business is unemployment. The retail and general trade sectors dominate, and half of the business owners run more than one venture. The informal economy in Nigeria is vast, with enterprises ranging from market traders and street vendors to roadside mechanics and home-based artisans. These businesses operate outside formal regulatory and tax systems, yet they are vital to the economy, providing jobs and fostering innovation.
The Informal Economy is both a Lifeline and a Bottleneck for Nigeria’s Economic Development
