Rural Development and Informal Sector: Challenges, Issues and Prospects in Nigeria

Abstract

This study assessed the impact of the Informal Sector on rural development, challenges, issues and prospects in Nigeria. The informal Sector is the economic activity that is not subject to government regulation or taxation and supports some of the most vulnerable in society. They are viewed as the driving force in the job creation process since it typically includes many small and micro-enterprises. This sector is therefore the fastest thriving and adds to employment and investment through its crucial characteristic of thriving anywhere. Despite these efforts of the informal sector, they are faced with challenges such as formalization which is also one of the causes of poverty because of the low level of the productivity and the absence of linkages with the market: as a result, this production comes down to a basic subsistence agriculture generating very poor incomes. Despite the wide range of informal sector of economic processes and activities, current knowledge of the size, causes, characteristics, and dynamics of the informal sector remains very scanty and inadequate. Key recommendations include; Government needs to create an enabling environment for the Informal Sector to thrive by removing multiple levies often imposed on them and provision of soft loan to them to cushion the effect of Covid-19 which ravaged the world last year.