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Thursday, December 1, 2022

Growing the Informal Sector

TO cope with the nation’s economy and alleviate the problems of Nigerians, the federal government some months ago announced a one-year extension of a moratorium on principal repayments for its intervention facilities.
IN addition to an initiative meant to cushion millions of people against the effects of COVID-19, it reduced interest rates on intervention loans from nine percent to five percent.
TO strengthen its loan-to-deposit-ratio policy, it stepped up its enforcement of directives to extend more credit to the private sector, as well as created a N50 billion target credit facility for affected households of the nation’s depressed economy and small-and-medium-scale enterprises.
IN other measures to enable Nigerians overcome the present economic challenges afflicting millions of people, it has embarked on a survival fund to be dispensed to the needy and youths.
WE commend the federal government for these heart-warming policies, but we believe if the federal government can make far more important initiatives to grow the informal sector the quality of life of Nigerians could improve.
WITH Nigeria having the highest number of the extreme poor in the world at 87 million people, a focus on the growth of the informal sector would bring many from the grips of poverty, especially as the poor constitutes 45% of the population.
SINCE the formal sector grew by only 0.8% in 2017, according to the National Bureau of Statistics (NBS), pertinent policies in the informal sector could lead to a strong growth in the economy and catalyze the employment of many.
MINDFUL of the fact that the informal sector grew by 8.5% between 2015 and 2017, a figure which clearly outstrips the rate of growth in the formal sector, government initiative in the informal sector could lead to a faster growth of the economy.
GIVEN the size of the informal sector of the economy, which experts have put to be about 50% to 60% of non-agricultural employment, efforts at growing the sector deserve attention of the nation’s policy makers.
THE nation since the emergence of COVID-19 has suffered a fall in both aggregate supply and demand, but if efforts are made at growing the informal sector, the nation will stop being embarrassed with having a greater number of the poor than India, which has a population of the poor put at just 73 million, despite having a population of 1.3 billion people.
THE informal sector of the economy involves activities such as photography, motor cycle service, catering, hairdressing and others, and if telling policies are tailored towards growing the sector, the generality of Nigerians will benefit through better service delivery and access to greater income.
WITH crime on the rise on a daily basis and hoodlums kidnapping people from all segments of the population, government plans at growing the informal sector will take millions from the streets, leading to a drastic reduction in criminal activities by many who are clearly disgruntled over the imperfections in the Nigerian society.
WE endorse the idea that the federal government should make pertinent attempts at growing the informal sector so as to stop Nigeria from being a laughing stock in the comity of nations.
CONSEQUENTLY, the federal government should promote the informal sector by using for an example the land use act to promote agricultural production, or making the Bank of Agriculture to make people be able to access its loans.
THE federal government should focus on activities such as fabricating, instead of focusing all its moves in the informal sector to agriculture, and it can do this by patronizing the products from the fabrication sector.
RETIRED military officers should be encouraged to become entrepreneurial with their knowledge, as they are highly skilled and trained, and it is not a mistake that countries such as Israel do the same thing.
NIGERIANS should also develop an entrepreneurial mentality, as this can only lead to the growth of the sector.
ALSO, an attitudinal change should happen in how Nigerians get their products, since a tendency to always import products rather than produce them would not only stall the growth of the informal sector, it will also continue to fuel corruption.
FINALLY, the government should enact enabling laws in important areas of the economy, such as foreign companies employing a certain number of Nigerians in their establishments, as this will eventually lead to knowledge transfer, a factor that could lead to the eventual growth of the informal sector.

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