Report: Only 2.8% of Nigeria’s Informal Business Owners Driven by Passion — Majority Turn to Entrepreneurship Out of Necessity
Story: written by Okafor Joseph October 22,2025
A new analysis from Moniepoint’s Informal Economy Report 2024 has revealed that just 2.8 percent of Nigeria’s informal business owners started their ventures out of genuine passion, while nearly 90 percent were pushed into entrepreneurship by economic hardship.
The report shows that most informal business founders are not motivated by innovation or personal interest but by survival in a challenging job market. About 51.6 percent of them started their businesses because they were unemployed, while 35.9 percent did so to supplement low wages from formal employment. Additionally, 3.8 percent inherited their ventures, and 5.9 percent cited other reasons.
According to the findings, Nigeria’s informal sector — made up of street vendors, artisans, and small-scale traders — has become a major safety net for millions who are unable to secure stable or well-paying jobs. This shadow economy now accounts for nearly 90 percent of the country’s Micro, Small, and Medium Enterprises (MSMEs), highlighting its vital role in cushioning citizens from poverty and joblessness.
The report also found a significant gender divide in motivation: while men mostly start informal businesses due to unemployment, women tend to launch side hustles to boost income and manage the rising cost of living.
Young Nigerians dominate this informal sector, with over half of the participants under 34 years old and 43 percent between 25 and 34. However, instead of driving innovation, their efforts are largely focused on survival amid widespread underemployment and shrinking economic opportunities.
Experts say the data exposes a deeper economic problem — not just a scarcity of jobs but the prevalence of low-quality, poorly paid work that fails to lift Nigerians out of poverty. As a result, millions of professionals and graduates are turning to the informal economy simply to sustain themselves.
