•   Nnabuife Ezimma K.

  •   Okoli Ifeanyi E.

  •   Anugwu Chika Clara


The informal sector is essential for economic growth. It is a key provider of jobs and income in emerging economies. But the crisis caused by the pandemic has had a significant impact on these economies. Therefore, this study investigates the impact of Covid-19 on the economic prospects of the informal sector of Nigeria and also proposes various strategies to support the sector. The study highlights some of the challenges facing the informal sector of Nigeria, such as institutional inadequacies, unsafe working conditions, poor enforcement and the non-participation of informal entrepreneurs in decision-making. The impact of Covid-19 is felt in different ways, which means that all the elements of total demand will be reduced. The study recommends that the government implement effective and cost-effective tax incentive packages to minimize the impact of corona virus pandemics on the informal sector. The government should also step down from paying taxes in critical areas in response to the crisis to support the informal sector and other businesses. 

Keywords: Informal sector, Covid-19, Economic prospects, Fiscal stimulus packages.


(2020). https://theodora.com/wfbcurrent/nigeria/nigeria_economy.html.

(2020). https://nairametrics.com/2020/05/25/new-normal-for-the-informal-sector/.

African Union Commission (2020). Impact of the Corona virus (COVID-19) on the African Economy, Retrieved from https://www.tralac.org/news/article/14483-impact-of-the-coronavirus-covid-19-on-the-african-economy.html accessed on 14th May, 2020.

Ahiuma-Young, V. & Adeniyi, A. (2008). Informal Sector Accounts for 90% of New Jobs in Nigeria in Vanguard, September 15, 2008, Retrieved from http://www.thenigeriabusiness.com/eco207.html. Accessed on 08/05/20.

Ahmed, H. G., Alhassan, S. M., & Alshammari, F. D. (2017). Social welfare scheme; a neglected component of public health care services in Nigeria. MOJ Public Health, 5(3): 101-104.

Akerele W.O. (1997). “The Effect of Economic Adjustment on Employment in the Urban Information Sector of Ibadan City”. NISER Monograph series, 14:22-25.

Aregbeshola, B. S., & Khan, S. M. (2018). Out-of-pocket payments, catastrophic health expenditure and poverty among households in Nigeria 2010. International Journal of Health Policy and Management, 7(9): 798.

Becker, K. F. (2004). The Informal Economy: A Fact Finding Study, Swedish International Development Cooperation Agency (Sida), Stockholm Sweden.

Chinese Center for Disease Control and Prevention (CDC) (2020). Novel Corona Virus, Wuhan China. Retrieved from https://www.cdc.gov/coronavirus/2019-ncov/about/index.html. accessed on 21/05/2020.

Cole, W. E. & Fayissa, B. (1991). The urban subsistence Labour force: Toward a policy oriented and empirically accessible taxonomy, World Development, 19 (7): 779-789.

De Soto, H. (2000). “Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else”, New York: Basic Books.

Fajana, S. (2000). Functioning of the Nigerian Labour Market. Yaba-Lagos, Labofin and Company.

Fapohunda O. J. (1991). “The Urban Informal Sector of Lagos” Centre for Management and Development Journal, 11: 23-36.

Farinmade A. & Anyankora M. I. (2012). The Challenges of Improving Informal Sector ActivitiesConditions in Lagos Island, Nigeria. British Journal of Arts and Social Sciences,6(2): 218-232.

Fasanya, I. O. & Onakoya, A. B. O. (2012). Informal Sector and Employment Generation in Nigeria: An Error Correction Model. Research on Humanities and Social Sciences. 2(7):48-55.

Fatokun, O. (2016). Curbing the circulation of counterfeit medicines in Nigeria. The Lancet, 388(10060), 2603.

Ikeije, U. U., Akomolafe L. & Onuba C. O. (2016). Labour Practices in the informal sector of Nigerian economy: A critical analysis. Global Journal of Arts, Humanities and Social Sciences, (2):6-14.

International Labour Organisation (ILO) (2003). Scope of the Employment Relationship: Report IV, International Labour Conference, 91st Session, International Labour Office, Geneva.

International Labour Organization (ILO). (1999). Reducing the Decent Work Deficit: A Global Work Agenda to the Circumstances and Realities of the Region, at the 89th Session of the International Labour Conference, Geneva.

International Labour Organization (ILO). (2002). Decent Work and the Informal Economy’ at the 90th Session of the International Labour Conference, Report VI, Geneva.

International Monetary Fund (2020). IMF Regional Economic Outlook: Sub-Saharan Africa: COVID-19: An Unprecedented Threat, International Monetary Fund, Washington, DC, Retrieve from https://www.imf.org/en/Publications/REO/SSA/Issues/2020/04/01/sreo0420 accessed on 16/04/2020.

Klantschnig, G., & Huang, C. (2019). Fake drugs: health, wealth and regulation in Nigeria. Review of African Political Economy, 46(161): 442-458.

Lawanson, B. (2011). Assessment of Home-Based Economic Enterprises in Residential Areas of Lagos Metropolis. An Unpublished PhD Thesis, Federal University of Technology, Akure.

Muhammad, F., Abdulkareem, J. H., & Chowdhury, A. A. (2017). Major public health problems in Nigeria: A Review. South East Asia Journal of Public Health, 7(1), 6-11.

Nigerian Institute of Social and Economic Research (NISER) (2007). ‘Report of baseline study of employment generation in the informal sector of the Nigerian economy’. Prepared by the Nigerian Institute of Social and Economic Research for the Africa Capacity Building Foundation and the ILO. Ibadan: ILO.

Nwaka V. (2005). “The Structure of Nigeria Informal Sector”, Journal of Social Science 2:19-42.

OECD (2009). “Is Informal Normal?: Towards More and Better Jobs in Developing Countries”, OECD Development Centre Perspective, OECD, Paris.

Ogunde, O. (2019). Nigeria’s informal economy: A catalyst for economic growth. Retrieved from https://businessafricaonline.com/nigeria-3/ accessed on 24/04/2020.

Ojo F. (1997). Human Resource Management: Theory and Practice: Panaf publishing, Inc.: Lagos.

Oluranti, S., Odunaike B. A. & Jawande J. O (2015). Informal economy operators and the challenges of growth in Oyo kingdom, Nigeria.International Journal of Social Sciences and Humanities Reviews, 5(3):162 – 167.

Omisakin I.S. (1999). “Factors influencing success or failure of an enterprise in informal sector” NISER Monograph series No.6:11-54.

Oni-Egboma, A. (2020). Covid-19 and the Informal Economy. Retrieved from https://businessday.ng/news/article/covid-19-and-the-informal-economy/ accessed on 02/05/2020.

Onwe, O. J. (2013). Role of the Informal Sector in Development of the Nigerian Economy: Output and Employment Approach in Journal of Economics and Development Studies. 1(1):60-74.

Onyekwena C. & Ekeruche M. A. (2020). Understanding the impact of the COVID-19 outbreak on the Nigerian economy. Retrieved from https://www.brookings.edu/blog/africa-in-focus/2020/04/08/understanding-the-impact-of-the-covid-19-outbreak-on-the-nigerian-economy accessed on 02/05/2020.

Ozili, P.K. (2020). Covid-19 pandemic and economic crisis: The Nigerian experience and structural causes. MPRA Paper No. 99424, 1-12. Retrieved from https://pra.ub.uni-muenchen.de/99424/ accessed on 12/05/2020.

Portes A. & Haller W. (2005). The Informal Economy. The handbook of Economic Sociology 2nd ed. 403 – 425.

Schneider, F. & Enste, D.H. (2000). “Shadow Economics: Size Causes and Consequences” Journal of Economic Literature, 38:77-144.

Tamunomiebi M. D. & Ukachukwu, C. C. (2018). Indecent work and workers in the informal sector in Nigeria. International Journal of Scientific & Engineering Research, 9(3): 630 – 643.

World Health Organisation (WHO) (2020). Corona virus disease (COVID-2019) situation reports, Retrieved from https://www.who.int/emergencies/diseases/novel-coronavirus-2019/situation-reports, accessed on 22/06/2020.


Download data is not yet available.


How to Cite
Ezimma K., N., Ifeanyi E., O., & Clara, A. (2020). Informal Sector and Nigerian Economic Prospects: The Covid–19 Experience. European Journal of Business and Management Research, 5(4). https://doi.org/10.24018/ejbmr.2020.5.4.397