Jobberman

Nigeria’s
Informal Sector

A Pathway to Sustainable Economic Transitions for Young People

2500000 registered POS agents in Nigeria and they’re in the digital industry too.

Nigeria’s
Informal Sector

A Pathway to Sustainable Economic Transitions for Young People

Find out what a photographer, a fashion designer, and an Owambe caterer have in common

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Most young Nigerians work in the informal sector.

A larger number of the young population in Nigeria is employed in the informal sector debunking the notion that the formal sector is the major driver of the economy.

From the mallam who makes shoes down the street and the Owambe clothes dealer in the large market down to the baker and even the young graduate earning a lot on freelance platforms like Fiverr, Nigeria’s informal sector is much more than street hustles and unstructured small businesses.

Most young Nigerians work in the informal sector.

Overview of the Informal Sector

We started out this report with an open mind but a preformed idea of what the informal sector is.

We interviewed 500+ business owners in four focal sectors - Agriculture, Creative, Digital and Artisan Industries, 50% of whom were women. We also carried out surveys on 8000 businesses in rural, urban and suburban areas across the four focal points. Catch snippets of our findings below.

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What Do The Numbers Say?

If you’re big on numbers, digest these.

The agricultural industry is the biggest contributor to Nigeria’s economy.

There are over 1.3 million registered POS agents in Nigeria and they’re in the digital industry too.

For over 50 years, the informal sector has dominated the employment trends in Nigeria.

90% of new jobs are in the informal sector.

96% of workers in the informal sector have a degree.

The creative industry is the second largest employer of labour in Nigeria.

Your POS agent down the street is in tech too.

The Digital Industry

The digital sector is one of the fastest growing industries in the informal sector. It is also the most structured in terms of roles, and rewards. Those that fall in this category include your POS agents and the “online ad” guys (digital marketing experts). The sector stands as the third largest employer, experiencing rapid growth in GDP contribution and job creation.

According to the NCC, over 2.5 million jobs have been created by the digital industry.

Your POS agent down the street is in tech too.

The Digital Industry

A major insight from this industry is the proliferation of people with basic skills. The skill gap has created a remuneration gap and that in turn results in high staff attrition.

What is the major problem in the digital industry?

High influx due to a perceived notion of high and fast rewards. But there’s more…

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36%

of the labor force works in this sector.

The Agricultural Industry

Ever wondered where your food comes from? 90% of the agricultural produce in Nigeria comes from smallholder farmers. These farmers make up 80% of the entire agricultural labour force. Operational costs have increased by 30% and for agribusiness owners, this memes loss of customers and reduced output.

Women are participants of this industry. However, they’re more focused on harvesting and food processing.

The Agricultural Industry

Word of mouth referrals account for 81.75% of employment in the Agricultural Industry.

Hiring rate in the agricultural sector is on the rise and the major contributing factor is not staff leaving the sector. 66.5% of hiring is as a result of business expansion.

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80%

Earn less than $100 monthly.

The Creative Industry

This industry has the highest female representation in the informal sector. Those in this category include poets, cinematographers, caterers, fashion designers, skit makers, event planners, and artists.

The hairdressers and cupcake makers in your neighbourhood make up a huge part of the creative industry.

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The Creative Industry

Is “school na scam” true? 50% of employers in media and visual arts require educational qualifications.

The creative industry is one of the most unstructured parts of the informal sectors. Most of the players in this industry do not have communities that protect and provide growth opportunities for them.

Social media is one of the biggest drivers of the creative industry.

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57%

Demand technical training

The Artisan Industry

The major challenge with people in this industry is lack of soft skills. Globally, this industry is growing and there’s increased demand for players in this industry.

Those in this category include carpenters, welders, fabricators, plumbers, etc.
The artisan industry utilises the apprenticeship model largely for training.
Women hardly play in this industry because they’re perceived to be not strong enough. When they do, it is usually in lesser-skilled crafts.

Your favourite instagram furniture brand is in the artisan industry alongside Oga welder by the roadside.

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The Influence of Technology on the Informal Sector

Over 70% of the informal sector have attributed increase in sale volume to digitisation.

Tech has significantly enhanced the informal sector's efficiency, benefiting industries such as artisanship, creativity, technology, and agribusiness. Apps have made it easier to access artisans like plumbers and carpenters, expanding work opportunities. Creatives rely heavily on social media for exposure and customer acquisition, while tech professionals are offering better training and job access through innovation. Agritech has improved the management of agribusinesses, and overall, digitisation has provided upskilling opportunities and structured previously limited markets.

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Most young Nigerians work in the informal sector.

Unstructured Structures Governing Operations

Most players and industries have gatekeepers that facilitate entrance,operations, interest & opportunity. Anyone peering in from the out side thinks of the informal sector as grossly unstructured but there are unstructured and unrecognised structures. Some of them are:

The igbo apprenticeship model which includes hands-on training and a generous compensation at the end of the training.
Associations in the markets and mini communities among traders based on location and craft such as Iyaloja in Western Nigeria & the Market Traders Association of Nigeria.

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