A report by Jobberman Nigeria, in collaboration with the Mastercard Foundation, has highlighted the crucial role of Nigeria’s informal sector in driving economic growth and employment, while calling attention to significant digital skill gaps impeding its potential.
The report, which was released to provide an in-depth look at a sector accounting for a large share of the nation’s Gross Domestic Product, emphasizes the need for urgent interventions to support millions of Nigerians engaged in informal work.
The study reveals that 76.7 per cent of Nigerians work in the informal sector, with self-employment accounting for 75.4 per cent of all work engagements, reflecting the strong entrepreneurial spirit across the country.
The informal sector serves as a vital lifeline, particularly for youth, women, and vulnerable populations, offering employment and a means of survival for millions. However, despite its substantial contribution to the economy, the sector is held back by notable challenges, especially a shortage of digital skills and business development expertise.
One of the most pressing issues highlighted by the report is the “digital deficit,” which limits the growth and transformation potential of informal businesses.
Many informal sector workers lack access to digital tools and training, with marked disparities between Northern and Southern Nigeria in terms of skills rewards, talent retention, and training access.
As digital platforms increasingly influence informal work, these gaps present both opportunities and obstacles, calling for policy interventions that can accommodate new forms of work, such as freelancing and gig employment.
Lead Researcher for the study, Glory Aiyegbeni describes the informal sector as “Nigeria’s hidden economic powerhouse,” noting its potential beyond mere survival.
“The sector is a hub of innovation and entrepreneurship, but many workers are trapped in survivalist businesses, unable to transition to sustainable enterprises due to poor business conditions,” she said.
The report also explores the impact of digitization, which has disrupted traditional work patterns in the informal sector and led to the formal aggregation of workers and expanded upskilling opportunities. Yet, it stresses the need for inclusive, advanced policies to support this digital shift and ensure comprehensive access to modern work opportunities.
CEO of Jobberman Nigeria, Oreoluwa Boboye added that the findings lay out a “clear roadmap” for maximizing the sector’s potential. “By addressing digital and skill-based challenges, we can unlock sustainable growth and dignified employment for millions,” he noted.
He emphasized the value of supporting traditional models, like the Igbo Apprenticeship Model, which he called one of the largest business incubators in the world.
To bridge the sector’s gaps, the report suggests multi-channel training programs targeting soft skills, financial literacy, and small business management.
Other recommendations include creating digital marketplaces for fragmented industry verticals, enhancing support through local associations, and developing policies that respect the sector’s unique dynamics while offering greater protection and benefits for workers.
Overall, the report seeks to inform policymakers, business leaders, and stakeholders on the critical role of Nigeria’s informal sector, underscoring the urgent need for digital and skills-based interventions to enable the sector’s growth and facilitate a shift toward more dignified and sustainable employment.