Nigeria’s financial system is operating on a ‘survivalist’ mode, as 93 % of the nation’s workforce is trapped in casual employment, based on a report.
The findings are based mostly on the 2025 report by the Nigerian Financial Summit Group (NESG) entitled ‘From Hustle to First rate Work: Unlocking Jobs and Productiveness for Financial Transformation in Nigeria.’
The report highlights that there’s an amazing reliance on casual work, typically ‘survivalist’ actions that are actively hindering nationwide improvement and poverty discount.
Evaluation reveals that 81 % of Nigerian employees are concentrated in sectors comparable to subsistence agriculture and retail commerce, which supply very low productiveness.
Learn additionally: Nigeria can transform tough reforms into shared prosperity, unlock $1trn economy — NESG
The roles, specifically, vary from petty buying and selling and casual transport to roadside companies engaged by thousands and thousands of Nigerians.
These types of work supply severely restricted alternative for productiveness beneficial properties and revenue mobility.
Based on Musa Yusuf, founding father of the Centre for the Promotion of Non-public Enterprise, “These are the individuals sustaining the financial system by way of creativity, resilience and laborious work. But, from a coverage standpoint, the casual sector receives little severe consideration.
“If the sector delivers over 90 % of jobs, what’s the coverage framework to help it? Many operators are harassed as markets are demolished, artisans displaced, mechanics taxed and fined…Their contribution to the financial system is over N60 trillion, dominant in commerce, agriculture and blue-collar work…”
In the same vein, Chinwe Egwim, Eeconomist and banker, famous: “It’s not stunning that over 90 % of jobs are within the casual sector. Many Nigerians lack the required abilities and schooling to fill roles within the formal sector, resulting in excessive underemployment.”
The productiveness lure
Based on the report, the dimensions of casual work is immediately linked to Nigeria’s long-standing struggles with low labour productiveness.
For almost three a long time, from 1990 to 2018, Nigeria’s labour productiveness development averaged a meagre 1.5 % and has since been in decline.
This contrasts sharply with nations comparable to Indonesia and Malaysia, which noticed beneficial properties of two.5 % over the identical interval, demonstrating the potential for development with sustained financial reforms.
This deeply entrenched challenge is compounded by persistent nationwide crises, together with insufficient infrastructure, erratic energy provide, low industrial output, and widespread insecurity.
The shrinking formal sector
The basis explanation for the casual explosion is the lack of the formal non-public sector to generate enough jobs, the report mentioned.
Over the past decade (2015–2024), macroeconomic instability marked by two financial recessions – a unstable foreign money, and hovering inflation – have elevated the price of doing enterprise, constraining companies’ capability to broaden and rent.
Learn additionally: Reclaiming Nigeria’s Blue Economy: Anchoring sovereignty, jobs, and growth by 2035
Formal jobs accounted for a meagre 7.8 % of complete employment as of 2023, based on the Nationwide Bureau of Statistics (NBS, 2024), which underscores a weak non-public sector.
Moreover, solely 15 % of all employed Nigerians are wage earners, which means 85 % are self-employed, typically working exterior the safety of formal labour legal guidelines.
This labour market is strained additional by an estimated 3.5 million younger Nigerians coming into the workforce yearly. Many are compelled into underemployment, taking over roles like PoS operations and casual transport gigs which might be under their potential.
Regional disparities
The disaster shouldn’t be uniform throughout Nigeria, and regional disparities spotlight the uneven financial panorama.
Whereas states comparable to Lagos, the Federal Capital Territory (FCT) and Oyo present the very best shares of wage earners (Lagos at 33.8 %, FCT at 27.2 %), indicating a comparatively stronger, albeit nonetheless inadequate, the northern states inform a special story.
The northern states comparable to Jigawa (3.3 %), Sokoto (3.8 %), and Kebbi (4.6 %) have the bottom shares of wage earners, highlighting a heavy reliance on authorities and casual actions for employment.
Ability deficit and expertise migration
Exacerbating the job disaster is a extreme abilities deficit.
Employers report struggling to seek out employees with the required technical and gentle abilities comparable to problem-solving and digital literacy for the few mid-productivity jobs which might be out there.
An rising and compounding drawback is ‘japa,’ the growing migration of expert Nigerian employees.
Professionals in medication, ICT, finance, {and professional} companies are leaving for nations with higher pay and dealing circumstances, making a rising expertise hole that additional weakens the capability of home companies to develop, innovate, and compete in a low-productivity setting, the report famous.
Learn additionally: Tinubu defends economic reforms, boasts of rising revenues, debt stability at 31st NESG
The casual sector, which climbed to 93 % of complete employment within the second quarter of 2024, has dire nationwide implications. Firstly, restricted income mobilisation is a key consequence, as informality undermines the federal government’s capacity to gather taxes successfully.
Unlocking Nigeria’s potential hinges on elementary structural reforms geared toward strengthening the formal non-public sector, addressing the talents hole by way of schooling funding, and making a macroeconomic setting that incentivises enterprise enlargement and, crucially, the creation of respectable, high-productivity jobs at scale.
Equally, Egwum suggested, “We have to strengthen schooling and abilities acquisition, whereas investing extra within the blue-collar financial system. If sectors comparable to plumbing, welding, and comparable trades are higher structured, we’d see these numbers decline considerably.”
