As the world marked the birth of its 7 billionth inhabitant, poverty remains a devastating reality in both rural and urban areas. Facing an influx of people searching for a means of livelihood, urban areas have seen the subsequent proliferation of informal sector work, commonly called “petty trading” in Africa.

In Nigeria 80% of the population operates economic activities outside government regulations. Work of the informal sector here includes a wide range of small-scale and largely self-employed enterprises. With so many people working in so many areas, the informal sector provides work opportunity for millions of workers and has the potential to provide fair wages for workers and tax revenue for the nation.

Unfortunately, this potential has not been realized. The Economic Freedom Index ranks Nigeria’s economy as a “mostly unfree” economy. This rating reflects Nigeria’s high trade barriers, heavy regulations, instability, misguided economic policies, and excessive government interventions. Including the informal sector in the mainstream economy is a major pathway to realizing Nigeria’s full economic potential.

Nigeria, like many growing economies, has seen an increase in economic isolation and a widening income gap for millions of informal workers. The result is increased levels of crime and violence seen in the country, as workers see an economic growth model that does not work to increasingly integrate them legally and economically. In Nigeria and throughout emerging markets in Africa, it is key to focus on the integration of workers using flexible regulatory structures that adapt to the needs of the poor. These policies include the provision of basic services including safety nets such as basic social security for informal workers.

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