Key questions this article answers:
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Nigeria has a large informal economy. How does this contribute to low levels of financial inclusion?
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What are some approaches we can consider to digitise the informal economy?
If you spend sufficient time studying emerging markets and developing economies, you’ll observe that large segments of economic activity are informal, i.e. unrecognised, unregulated and unstructured.
Economic activities in informal sectors have fallen globally since 1991, but Sub-Saharan Africa and Latin America (and the Caribbean) still had the highest informal levels between 2010 and 2017. The IMF identifies Nigeria as having the largest informal economy in SSA; when calculated as a share of GDP between 2010 and 2014, this figure is 65%.
More recent data suggest Nigeria’s informal sector remains significant and vital to the economy.
Even though accurately sizing the informal sector is complex, researchers using econometric methods estimate that Nigeria's informal sector share of GDP
