Nigeria’s ‘Hustle Economy’: 93% of Workforce Stuck in Informal Jobs, NESG Warns
Story: written by Okafor Joseph October 8,2025
Nigeria’s economy is running largely on survival instincts, with an overwhelming 93 percent of its labour force trapped in informal employment, according to a new report by the Nigerian Economic Summit Group (NESG) titled “From Hustle to Decent Work: Unlocking Jobs and Productivity for Economic Transformation in Nigeria.”
The report paints a grim picture of a workforce dominated by “survivalist hustles” — low-income, low-productivity activities that contribute little to national growth or poverty reduction.
It shows that 81 percent of Nigerian workers are engaged in sectors such as subsistence farming and small-scale retail trade, offering minimal opportunities for productivity growth or social mobility. Millions survive through roadside trading, informal transport, or small repair services.
Economic analyst Musa Yusuf, founder of the Centre for the Promotion of Private Enterprise (CPPE), described these workers as “the true drivers of the economy through resilience and creativity,” lamenting that the informal sector remains largely ignored by policymakers.
Productivity Decline
NESG’s data reveals that the dominance of informal work is tied to Nigeria’s chronically weak productivity, which grew at an average of just 1.5 percent between 1990 and 2018 — and has since declined further.
By contrast, countries like Malaysia and Indonesia achieved sustained productivity growth of 2.5 percent over the same period through economic reforms and industrial expansion.
Persistent issues such as inadequate infrastructure, unreliable power supply, insecurity, and low industrial output have further entrenched the problem, the report said.
Shrinking Formal Sector
The formal private sector’s weakness remains at the heart of the jobs crisis.
Data from the National Bureau of Statistics (NBS, 2024) shows that only 7.8 percent of jobs in 2023 were in the formal sector, while 85 percent of Nigerians are self-employed — mostly outside formal labour protection.
Each year, about 3.5 million young people join the labour market, yet most end up in underpaid or informal roles such as PoS operations, motorcycle transport, or petty trading.
Regional Disparities
The report also highlights stark regional inequalities.
Southern states like Lagos (33.8%), FCT (27.2%), and Oyo have relatively higher shares of wage earners, reflecting stronger private economies.
In contrast, northern states such as Jigawa (3.3%), Sokoto (3.8%), and Kebbi (4.6%) rely heavily on informal work and government employment, showing deep structural imbalances.
Skills Crisis and Brain Drain
The report warns of a severe skills gap, with employers struggling to find workers equipped with technical, digital, and problem-solving abilities.
This challenge is worsened by the “japa” phenomenon — the mass migration of skilled professionals abroad for better pay and working conditions.
Between 2015 and 2024, repeated economic shocks — including two recessions, currency volatility, and high inflation — have crippled private firms’ ability to expand or hire.
Industries such as medicine, ICT, finance, and engineering have seen a significant loss of skilled workers, further weakening Nigeria’s competitiveness and productivity.
Yusuf stressed that while the informal economy contributes over ₦60 trillion annually, its operators face harassment, displacement, and punitive taxation.
Economist Chinwe Egwim added that “the dominance of informal jobs is tied to low education and skill levels, leaving millions of Nigerians underemployed and outside formal systems.”
