Home > Economics, Development Studies > Vol 1 No 1 June 2013 Abstract 5
Role of the Informal Sector in Development of the Nigerian Economy: Output and Employment Approach
Onyemaechi Joseph Onwe
Journal of Economics and Development Studies, 1(1), pp. 60-74.

Abstract
The problem focus of this paper is an observed general negligence of the informal sector or the informal economy in development policies and national accounting. This has been the case irrespective of the fact that the sector has been noted as accounting for about 21 percent of total employment in Sub-Saharan African countries (ECA, 2005), and about 38 percent of the gross domestic product (GDP) in Nigeria (FOS, 1999). This background informed our interest on the economic role of the informal sector, using Nigeria as a reference point. The methodology was a survey of available literature on growth, characteristics, and economic significance of the informal sector. The survey was empirically supported by data from the survey of the Nigerian informal sector, carried out by the Central Bank of Nigeria (CBN) in collaboration with the then Federal Office of Statistics (FOS) and the Nigerian Institute of Social and Economic Research (NISER). Our analysis indicate as follows: first, the traditional or informal sector is continuously expanding in developing countries, and has been serving as a ‘safety belt’ in providing employment and income to the teaming poor; secondly, informal sector activities, often described as unrecognised, unrecorded, unprotected, and unregulated by the public sector are no longer confined to marginal activities but also included profitable enterprises in manufacturing activities; third, the informal sector is largely characterized by low entry requirements, small-scale operations, skills acquired outside of formal education, and labour-intensive methods of production; forth, the informal sector is defined according to different classifications in terms of activity, employment category, location of actors, and income and employment enhancing potential. Other observations were that, in discussing issues concerning the informal sector, it is necessary to distinguish the traditional view from the current or modern view; in Nigeria, the dominant informal manufacturing activity appears to be in food, beverages, and tobacco; in the on-going economic and financial crisis that characterise the economies of African countries, including Nigeria, the informal sector has the potential to provide the needed impetus for employment generation; and, the existing policy responses to growth of the informal sector have not been encouraging. Given these observations, the paper recommends as follows: (i) emphasis on the informal sector’s role in Nigeria’s development policies; (ii) making data on the informal sector available for in-depth analysis; (iii) thinking in the direction of inclusion of the informal sector in national income accounting; (iv) financial and technical support of identifiable informal-sector activities such as, retail trade, small-scale home-based manufacturing activities, and services; and, (v) need for scholars to understand existing gaps in the economic use of the informal sector in Nigeria and other African countries.

Full Text: PDF

Onwe, Joseph Onyemaechi. (2013). Role of the Informal Sector in Development of the Nigerian Economy: Output and Employment Approach. Journal of Economics and Development Studies, 1(1), pp. 60-74.

Alsop, R and Nina, (2005), "Measuring Empowerment in Practice: Structuring Analysis and Framing Indicators," World Bank Policy Research Working Paper 3510, February 2005, Washington, DC.

Apusigah, A. Atia (2004). Empowering women for social change, Legon Journal of Sociology.

Apusigah, A. A., Tsikata, D., and Mukhopadyay, M. M. (2011) Women’s Rights Organisations and Funding Regimes in Ghana. http://www.pathwaysofempowerment.org/Womens_Rights_Organizations_and_Funding_Regimes_in_Ghana.pdf [accessed on 18 May 2012].

Awumbila, Mariama (2001). Situational Analysis. In D. Tsikata (ed). Gender Training in Ghana. Accra: Ghana: Woeli Publishing

Bell, D (1995). Approaches to Community Participation. Environ, Leicester.

Briggs, X and Mueller, E. (1997), From Neighborhood to Community: Evidence on the Social Effects of Community Development Corporation. Community Development Research Center.

Brown, C. K. (1984),Government and voluntary participation in Ghana’s rural development programmes. Ghana University Press.

Camfens, H. (1997). International Review of Community Development Theory. In

Camfens, H. (Ed), Community Development around the World: Practice, Theory, Research, Training (pg 25). University of Toronto Press.Toronto Buffalo London.

Campbell, B. (1994), ‘Praise the community, blame the mothers’, The Independent, 30 November 1994.

Chambers, R. (1983), Rural Development: Putting the last first, London: Longman.

Checkoway, B. (1997). Core concepts for community change. Journal of Community Practice, 4,

Christenson, J. A, Fendley, K. and Robinson, J. W. (1989) Community Development. In: Christenson, J. A and Robinson J. W., eds. Community Development in Practice. Ames, IA: Iowa State University Press, pp.3- 25.

Cohen, S., (1996), ‘Mobilizing communities for participation and empowerment’, in Servos, J., Jacobson, T.L. and White, S.A. (eds), Participation for Social Change, New Delhi: Sage,

Donkor, K., and Lea, J.P (1980), Self-reliance and African building materials industry: Cautionary tale from Ghana. African urban quarterly.

Dorvlo, L.K.T. (1973), Community Development in Ghana in the Context of an Integrated Approach to Rural development, Edinburgh.

Ferguson, F. and Dickens (1999) eds., Urban Problems and Community Development.Brookings Institution.

Flecknoe, C & Neil, M. (1994), The What, How and Why of NeighbourhoodCommunity Development. Community Matters, London.

Gorman, Elizabeth (2010) Community Economic Development Movements in Rural Ghana: Using Agricultural Technologies to Alleviate Poverty, Shepherd Poverty Progam Papers, http://www.wlu.edu/documents/shepherd/academics/cap_10_Gorman.pdf [accessed on 10 May 2010].

Jefferies, R. (1992). Urban attitudes towards the economic recovery programme and government in Ghana.

Jimu, I. M (2008). Community Development: A Cross-Examination of Theory and Practice Using Experiences in Rural Malawi.Africa Development, Vol. XXXIII, No. 2.

Jorgen, Gren (2003) Reaching the Periperal Regional Growth Centre: Centre-Peripheral convergence through the structure funds’ transport infrastructure actions and the evaluation of the centre-periphery paradigm.European Journal of Spatial Development.

Hallett, C. (1997), Critical Issues in Participation. Association of Community Workers,Sheffield.

Hutchful, E (1991), Shades of meaning: The struggle to define democracy in Ghana. Paper presented at the annual conference the Canadian African Studies Association, York University, Toronto, Canada.

Kendie, S. B. and Guri, B. (2006). Indigenous Institutions, governance and development: community mobilisation and natural resources management in Ghana. inInternational Conference on Endogenous Development and Bio-Cultural Diversity, Geneva, Switzerland, (332-349).

Kokor, J.Y. (2001), Organizational Consideration for Community Development; Community Development in sub-Sahara Africa: Spring Center, Germany.

Mendes, P. P. (2008). Teaching community development to social work students: A critical reflection. Community Development Journal, 2008.

Neocosmos, M., (1998), ‘From peoples’ politics to state politics: Aspects of national liberation in South Africa’, in Olukoshi, A.O. (ed.), Politics of Opposition in Contemporary Africa.Uppsala

Oakley, Peter et al. 1991. Projects with People.The practice of participation in rural development.International Labour Office (via Intermediate Technology Publishing, London).

Pandey, R. S. (1981). Strategies for social development: An analytical approach. In J. F.Jones, & R. S. Pandey (Eds.), Social development: Conceptual, methodological and policy issues(pp. 33-34-49). Delhi: Macmillan India.

Prah, Mansah and Yeboah, Alfred (2011) Tuobodom Chieftaincy Conflict in Ghana: A Review and Analysis of Media Reports, The Journal of Pan African Studies, vol.4, no.3, pp. 20-33.

Rappaport, Jay. 1981. “In praise of paradox: A social policy of empowerment over prevention,” American Journal of Community Psychology, 9 (1), 1-26.

Perroux, François (1950): Economic space: theory and applications. Quarterly Journal of Economics, Vol. 64: 90- 97.

Sautoy, P (1960), Community Development in Ghana. London: Oxford University Press.

Shortfall, S. and Shucksmith, M., ( 2001), ‘Rural development in practice, issues arising in Scotland and Northern Ireland’, Community Development Journal 36(2)

South African Institute of International Affairs (SAIIA) (2004) Ghana and Civil Society Clash over Allegations of Corruptionhttp://www.saiia.org.za/archive-eafrica/ghana-and-civil-society-clash-over-allegations-ofcorruption. html [accessed on 17 May 2012].

UNDP.(1993), Human Development Report. Oxford: Oxford University Press.

Wanderman.A (1981), A framework of participation in community organization.Journal of Applied Behavioral Science. 17(1); 27-58

Wharf, B (1999), Community Development in Canada; Community Development Journal, vol 34, number 4.

Wilcox, D (1994), Guide to Effective Participation. Partnership Books, London.

World Bank ( 2002), Empowerment and Poverty Reduction: A Sourcebook, edited by Deepa Narayan. Washington, DC: The World Bank.

Yates, L. Bradford (2001) Applying Diffusion Theory: Adoption of Media Literacy Programs in Schools. Paper presented to the Instructional and Developmental Communication Division. International Communication Association Conference, Washington, DC, USA.

York, A. S. (1994). Towards a conceptual model of community social work.British Journal of Social Work, 14(3)

Thaddeus Akum Aasoglenang is a Lecturer at the Department of Community Development, Faculty of Planning and Land Management, University for Development Studies, Wa Campus. Before becoming a lecturer in 2008, Aasoglenang had previously worked in the NGOs sector since the year 2001 and became the northern sector office Regional Manager of Centre for the Development of People (CEDEP). He obtained Bachelor of Arts Integrated Development Studies at the University for Development Studies and MSc. in Development Policy and Planning also at the Kwame Nkrumah University of Science and Technology. He is currently a Ph.D candidate at University for Development Studies. His research interest focuses on communal conflicts and resolution processes, water and sanitation management, local governance, community development and rural poverty. He has a number of publications to his credit. He is currently the Assembly Member representing Nandomkpee electoral area at Nandom District Assembly.

Samuel Ziem Bonye had his Ordinary and Advance level Education in the Lawra and Wa Senior High Schools in the Upper West Region of Ghana, West Africa respectively and the University for Development Studies (UDS), Tamale, Ghana. He obtained Bachelor of Arts (Integrated Development Studies) and MPhiL Development Studies degrees in UDS, Tamale. He is currently a Doctoral Student in the University for Development Studies. Mr. Bonye has accumulated vast knowledge and practical experiences in development issues through research and publication of several articles and a book (over 20 publications) as well as his several years of work with NGOs, Goverment Organizations and as a consultant. He is an Editorial Board Member of several national and international peer review Journals.
He worked as a Research Assistant from 2002-2008 in the University for Development Studies and is currently a Senior Lecturer and the Head, Department of Community Development, Faculty of Planning and Land Management, UDS. He also lectures, Community Mobilization and Development, Development Theory, Research Methodology, Indigenous Knowledge and Development and Population and Development among others. Mr. Bonye has served in various capacities within the University, he has served as a member of the Academic Board; Faculty Board and Departmental Board. He is also a member of the Council for the Development of Social Science Research in Africa (CODESRIA). His on-going research and research interest focus on indigenous knowledge and local organizations, conflicts and natural resources management in Northern Ghana.