Employment Creation Potentials of the Informal Sector in Nigeria

Abstract

Labour markets in Sub-Saharan Africa are often categorized into formal and informal sectors. However, the reduction in the absorption capacity of the formal sector has increased the preponderance of unemployment and has necessitated the need to look for an alternative sector to absorb the excess labour supply. This study examines the employment creation potentials of the informal sector in Nigeria. Primary data were randomly collected for the study via interview and administration of questionnaire to respondents in six randomly selected areas in Ilorin metropolis, Kwara State, Nigeria. The data collected were analyzed using a descriptive analysis. The results from the study showed that the informal sector in the country has the capacity to absorb all categories of workers irrespective of their levels of education, and is a veritable tool for employment creation, income generation and poverty reduction in Nigeria. The study concludes that the informal sector is a veritable tool towards reducing unemployment in Nigeria and recommends the development of an employment strategy that is informal sector based.

Keywords: Employment Creation, Formal and Informal Sector, Labour Markets, Nigeria.