In a media briefing with journalists, renowned economist Dr. Rashidat Sumbola Akande cautioned that Nigeria’s informal sector is at risk of stagnation due to increasing economic challenges.

She called for urgent policy interventions to safeguard millions of livelihoods dependent on the sector.

Dr. Akande, a lecturer at Kwara State University, Malete, and an expert in development economics, expressed concern over the rising cost of living, inflation, and declining access to credit, which she described as threats to Nigeria’s economic stability.

“The informal sector remains the backbone of our economy, but it is becoming increasingly difficult for small business owners to sustain their operations amid these economic pressures,” she noted.

According to Dr. Akande, recent studies indicate that over 70% of Nigeria’s labour force operates in the informal economy, yet they face persistent challenges such as inadequate infrastructure, lack of capital, and inconsistent government policies.

She highlighted the impact of inflation on purchasing power, explaining that rising prices of goods and services are disproportionately affecting small-scale traders and artisans.

“When the cost of raw materials and essential goods skyrockets, small businesses suffer the most. They operate on thin profit margins and cannot absorb financial shocks like larger corporations can,” she explained.

Dr. Akande also raised concerns about financial exclusion, stressing that many informal business owners lack access to affordable credit facilities.

“Microfinance institutions and commercial banks must develop flexible loan systems tailored to the needs of informal workers. Without financial support, many businesses will collapse,” she warned.

She further addressed the issue of government regulations, noting that while formalizing the informal sector is important, excessive bureaucracy and multiple taxation often discourages entrepreneurs from registering their businesses.

“Rather than burdening informal businesses with complex registration processes, we need policies that make formalisation attractive by offering incentives such as tax breaks and access to government funding,” she suggested.

When asked about solutions, Dr. Akande emphasised the importance of skill development and training programs to enhance business sustainability. She advocated for government partnerships with educational institutions to provide business management training for informal entrepreneurs.

She also highlighted the role of technology in boosting economic resilience, stating that digital tools can help small businesses access new markets and streamline their operations.

“The adoption of e-commerce and digital payment platforms is no longer optional—it is a necessity. Entrepreneurs who leverage technology will have a better chance of surviving economic uncertainties,” she said.

As the briefing concluded, Dr. Akande urged policymakers to take immediate action in addressing the pressing issues affecting the informal sector.

“A thriving economy that is inclusive of the informal sector benefits the entire nation. It is time for stakeholders to prioritise inclusive economic policies that support small businesses and informal workers,” she concluded.

Her insights sparked discussions among journalists and economic analysts, reinforcing the need for urgent reforms.

Dr. Akande’s expertise continues to influence economic policies, as she remains a key voice in advocating for sustainable economic development in Nigeria.