Multidimensional Poverty Analysis and Informal Sector in Nigeria

Abstract

The ability of the formal sector (public and organized private sectors) in Nigeria to generate employment and provide means of livelihood has been truncated by the economic crisis that dates back to the 1980s. The informal sector therefore, serves as the safety net that provides jobs and means of survival to the teeming unemployed population in the country. This paper therefore, examines: job creation in the informal sector; income earning capacity of informal sector operators; and the level of poverty reduction recorded by the operators of the informal sector. Apart from the specific objectives, other issues examined include, the background; operational; and the economic characteristics of the operators. A total of 100 structured questionnaires were distributed to informal sector operators to collect data in Ilorin metropolis. Out of this, 81 were returned valid and analyzed using descriptive statistics and multi-dimensional poverty index. The results from the study show that informal sector activities provide employment and income for the urban poor. About 83 percent of operators were employed on full-time basis while 16.1 percent of the respondents are employed on part-time basis. The mean previous employees  were computed at 2; current employees per operator stand at 4 on the average and that, an operator employs between 1 to 14 people maximum. Some other operators train apprentices who become self employed upon completion of the training. The mean apprentice per operator was estimated at 3.  Most of the informal sector operators earn an average income of N8, 468.42 per day. The study finds further, that reduction or increase in multi-dimensional poverty is strongly determined by number of hours worked per day; number of days worked per week; earnings; educational attainment and savings per day. The paper however, identifies a weak institutional support and thus recommends more support from the government in order to combat unemployment and poverty in the country.