By Amarachi Alozie
THE Federal Government has been advised to evolve policy measures to encourage the growth of the informal sector of the economy.
A professor of economics at the Covenant University, Isaiah Olurinola, who made the call said the informal sector is an important group in developing economies in the world, noting that the sector’s enterprises are facing challenges that are affecting their contribution to the economic development of the country.
Presenting a paper at the 10th Inaugural Lecture of the University entitled: Repositioning the Informal Economy for Employment Creation and Entrepreneurial Development in Nigeria, Professor Olurinola said: “the informal sector has proved a major employer of labour, not only for those displaced in the formal sector, but also for some persons who recognised the opportunities that the sector offers and therefore get into the sector voluntarily to take advantage of its income and employment opportunities.”
He noted that the benefits arising from the income and employment opportunities available in the informal sector are attractive and include skills development through the apprenticeship system, possibility of owning an enterprise and becoming a master craftperson after training, and the opportunity to make a career.
According to him, “not all the operators in the informal sector are living below the poverty line, but the informal sector activities that require highly skilled labour generate income that is in some multiples of the national minimum wage, and present ladder out of poverty rather than being a dead end. Apart from employment generation, the urban informal sector contributes to the informal sector entrepreneurial development.”
He, however, said that informal sector entrepreneurs are handicapped in several areas including the lack of support from the government and the formal sector entrepreneurs, lack of access to credit facilities/financial support and frequent harassment by local government officials.
Professor Olurinola advised that the informal sector needs policy prescriptions that will assist the repositioning of the sector, consisting of “those that are doing well and above poverty line, those that are just on or a little above the poverty line and those that are in poverty”, stressing that each of these group needs policy action that will improve their position in the informal economy.