Professor of Marketing, Lagos Business School (LBS), Pan Atlantic University, Lagos, Uchenna Uzo, has said that the informal markets in Nigeria are ready to scale up activities and become a major force in growing the nation’s economy.
He said for the informal markets to achieve this, the government must provide the right regulations and ensure policy change that can facilitate the process.
Uzo, who delivered a paper titled, “The Hidden Gem: Success in Africa’s Informal Markets”, at the 14th inaugural lecture of Pan Atlantic University, Lagos, said the informal markets accounts for more than 70 per cent workforce in sub Saharan Africa, 90 per cent of its transaction and 70 per cent of the continent’s GDP.
The expert pointed out that most enterprises in Africa’s informal markets fail because they didn’t comprehend how these markets operate.
Debunking the fallacies about the sector, Uzo said the belief that informal markets are illegal, with no structure that will either modernise or die.
He explained that the market, which is a social bonding machine, thrives on traditional trade customs with characteristics that include role swapping, word of mouth agreements, rudimentary record keeping, cash based transactions and recruiting ethnic, family and friendship affiliations.
Uzo stressed that although the market appears unstructured, they employ a sophisticated and distinctive business method that include organising principles, contractual procedures and price setting agreements that define the fundamental components of informal marketplaces in Africa.
He said his research in this area found that trust, power and habitual improvisation are the market three fundamental organising principles, while contractual agreements use haggling as fuel.
Discussing the framework for success in the sector, he prescribed (MICE), adding that the practitioners must master the art of negotiation and cultural awareness, invest in talent, change mindset and earn the market’s trust.
In calling for policies that will enhance the operation of the market, Uzo said these regulations must address upskilling, capital access, taxation, and corporate practices.
In an interview with The Guardian on the side-line of the lecture, the don said President Bola Tinubu-led administration is moving in the right direction, as it has put in place policies that would make the macro-economy more stable in the long term.
He said Nigerians would like to see more policies that will cushion the effect of some of the radical changes of the administration.
“So far, the policies are in the direction of revenue generation, but we would also have to promote policies that encourage production and make it easier for consumers to have more money in their pockets. If those are also done, we are likely to see more growth and development,” he said.
Chief Operating Officer of the institution, Dr Peter Bamkole, hailed Uzo for his presentation, saying the lecture showed that element of trust is important and one cannot be part of the system if he can’t be trusted in informal markets.
