Nigeria high unemployment rate – Maximising the informal sector


Nigeria high unemployment rate – Maximising the informal sector

The unemployment rate in Nigeria is increasing daily as the number of graduates is also increasing and the government is yet to come up with solutions to solve this endless problem.

The Nigerian government has tried several ways to solve these issues by introducing short term schemes that would employ unemployed Nigerians for a stipulated period and once it expires, the participants are discharged.

It is evidently clear that it is practically impossible for the government to provide jobs for all the graduates in different disciplines and this is where the informal sector comes to play and it sad that we have really downplayed the importance of an informal sector in reducing the high rate of unemployment across the country.

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In countries like the United States of America, the presence of private companies like Amazon, Facebook, Google, eBay amongst others have played a big part in the reduction of unemployment in the country but it is also important to note that before these companies can function, certain things have to be put in place by the government and this article would touch some of those things and ways that our government can aid the informal sector to grow.

There are various definitions for the informal sector but we would try to use the definition that our readers would understand or grasp better.

The informal sector according to market business news is a part of the economy that is not recognized as a normal source of income and it can also include smuggling and drug pushing but this article would focus on the legal sources of income and not the illegal sources of income.

The informal sector is also known as the underground economy, black economy, shadow economy, or grey economy and the informal sector can be defined as the sector where education is not compulsory before one can become eligible to work. We would outline a few legitimate jobs in the informal sector below:


Tailoring is also known as designing, cutting, designing, and finishing clothes and this has been rebranded in Nigeria to fashion designing. A lot of unemployed Nigerians have ventured into tailoring as it is one of the easiest jobs available in the Nigerian informal sector.

Software and Web Development:

Software development is the process of designing, creating, testing, and deployment of software that meets a specific need of people. Software development does not require one to have a degree but it takes time to learn and probably to earn a living from it.

Software development is one of the most highly paid jobs in Nigeria and recently, a tech company named Paystack was sold to its foreign counterpart stripe for a whopping $200m, and as at the time of the sale, it was worth over N80bn.


A lot of people are not familiar with the term eCommerce or drop shipping but this is a common business amongst a lot of Nigerian youths especially females.

eCommerce or drop shipping is a form of business in which the goods do not need to be physically present with the seller and this means that someone who is staying in Abuja can sell a product that in Lagos without he/she touches the product physically.

With that being said, we would further explain how the federal government can aid the informal sector across the Nation as an increase in output by the informal sector would be a great gain for the economy of any government including Nigeria which this post is focused on.


There are several ways through which the government can aid the progress of the informal sector in Nigeria and some of the ways are:

By the Provision Of Good Roads:

Bad roads are common in Nigeria and this has negatively affected those whose business requires them to move from one place to another especially those who are into eCommerce or drop shipping.

Because of bad roads, people are forced to use alternative routes which might then increase the distance they covered and this, in turn, affects the prices of goods they are transporting.

In the North, there is a route by which one can access the southwestern states by following the Jebba road which connects Niger state and in Ilorin but because the road is bad, travellers would now be forced to follow Kogi state which has a lot of bad roads and this, in turn, can discourage people from moving from one part of the country to another to buy or sell goods.

Provision Of Stable Electricity Supply:

The supply of electricity in most parts of the country is alarming as it is practically impossible to get 24 hours uninterrupted power supply anyway in these countries except in places occupied by VIPs or senators.

Electricity is needed to run machines used by those in the informal sector and the government should improve or stabilize the supply of electricity in various parts of the country and this, in turn, would increase the output from the informal sector.

Finally, the government should also ensure that they make policies that support the growths of businesses that make up the informal sector as a lot of policies have brought about the downfall of some companies instead of lifting it up.

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The Impact of the informal sector cannot be overemphasized as with each passing year, the rate of gaining a job in a government agency fades away hence the reason for us to ensure that we strengthen the informal sector and also make laws or policies that aid their growth so that they would be expansion and this, in turn, can lead to the massive employment of unemployed Nigerians.

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