Informal Sector Remains the Heartbeat of Nigeria’s Economy — VP Shettima

Vice President Kashim Shettima has reaffirmed the vital importance of Nigeria’s informal sector, describing it as the “heartbeat of the economy.”

Shettima made this remark in Abuja during the presentation of the Informal Economy Report 2025, organised by Moniepoint Microfinance Bank in partnership with the Federal Ministry of Industry, Trade and Investment and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN).

Represented by the Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, the Vice President noted that the Tinubu administration places strong emphasis on the informal sector, which he said has been central to Nigeria’s economic resilience.

“The informal economy lies at the heart of Nigeria’s story of resilience, creativity, and enterprise — from market traders to artisans, service providers, and young digital entrepreneurs. Millions of Nigerians power commerce daily in ways that are unseen yet indispensable to our economy,” Shettima stated.

He commended Moniepoint for its decade-long contribution to financial inclusion, noting that the institution has supported millions of informal businesses across Africa.

The newly released report revealed that women dominate Nigeria’s informal sector and remain its most resilient operators, while youth participation continues to expand rapidly — a trend that calls for targeted policy support.

According to the report, informal business costs have increased by 80% in the past year due to inflation and operational challenges. Despite these pressures, the sector continues to drive employment and productivity across the country.

Shettima further highlighted that Nigeria hosts over 39 million Micro, Small and Medium Enterprises (MSMEs), which account for 96% of all businesses, contribute about 50% to GDP, and employ over 84% of the national workforce.

“This report gives an important window into the challenges and opportunities within the sector. It provides a stronger foundation for inclusive, evidence-based policymaking,” the Vice President added.

Speaking at the event, Babatunde Olofin, Managing Director of Moniepoint Microfinance Bank, described the report as “a mirror of Nigeria’s economic reality,” adding that it would guide policymakers and financial institutions in driving inclusion and support for informal enterprises.

In a goodwill message, the Special Adviser to the President on Job Creation and MSMEs, Temitola Adekunle-Johnson, praised Moniepoint for empowering millions of small businesses through affordable access to finance.

Also addressing participants, SMEDAN Director-General, Charles Odii, announced that small business ownership in Nigeria has risen to 39.6 million. He added that enterprises earning below ₦15 million annually are now exempted from company income tax.

Odii further disclosed that SMEDAN, in collaboration with the Corporate Affairs Commission (CAC), has commenced free registration for 250,000 informal businesses to encourage formalization and access to government support.

“We are formalizing small businesses at no cost. The goal is to give them identity, access to finance, and inclusion in the formal economy,” Odii said.

The event concluded with renewed calls for collaboration among government agencies, financial institutions, and entrepreneurs to strengthen Nigeria’s informal economy — widely regarded as the true engine of national growth and stability.

Opinion Nigeria News