Contribution of Informal Sector to Nigeria’s GDP: A Review Paper Approach

Ibrahim Audu Mohammed; Aishatu Adamu

doi:10.56201/ijssmr.vol.11no12.2025.pg615.621

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Contribution of Informal Sector to Nigeria’s GDP: A Review Paper Approach

Ibrahim Audu Mohammed, Aishatu Adamu

Abstract

The informal sector plays a pivotal role in Nigeria’s economic development, contributing significantly to the country’s Gross Domestic Product over the years. This study examines the contribution of the informal sector to Nigeria’s GDP from 2012 to 2024, highlighting its trends, significance, and implications for economic policy. Findings reveal that the informal sector consistently accounted for a substantial share of GDP, with estimates ranging from approximately 41% to over 65% during the period under review. It also remains a key source of employment, engaging over 65% of the working population in various unregulated and often undocumented economic activities such as agriculture, trade, transportation, and services. Despite its economic value, the sector faces structural challenges including limited access to finance, lack of social protection, and regulatory exclusion. The paper argues that effective policy interventions aimed at formalization, financial inclusion, and capacity building are essential to harness the full potential of the informal sector. This research underscores the need for a more inclusive economic framework that recognizes and integrates informal sector dynamics into national development planning.

Keywords

Economic ResilienceFinancial InclusionNigeria`s GDPInformal Sector

References

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Contribution of Informal Sector to Nigeria’s GDP: A Review Paper Approach

Abstract

Keywords

References

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