“Neglecting the Informal Sector is Neither Good for the Overall Economy Nor Fair to the Vast Majority of People”— Professor Folawewo

Oluwatosin Adeoye

The University of Ibadan held its 540th Inaugural Lecture titled “The Unwanted and Uncherished Maid, Yet Saving Grace For The Reckless Household Head” on Thursday, January 25, 2024 at Trenchard Hall, University of Ibadan.

The lecture was delivered by Professor Abiodun Adewole Folawewo, Professor of Macroeconomics, Labour and Development Economics, of the Department of Economics, University of Ibadan. In the course of the lecture, he decried the lackadaisical attitude towards the informal sector of the economy.
He emphasized the importance of the informal sector on the general economy, and how its abandonment or neglect would bring harm to the majority of the people who solely depend on it.

Professor Folawewo advocated for caution and proper observation of the peculiarities of the economy in improving the conditions of the informal sector, which have been largely shifted to the formal sector.

He also stressed the fact that the informal sector plays a significant role in contributing to the economic growth, as it paves way for job opportunities and reduces the effects of unemployment that stems from shortage of employment opportunities in the formal sector.

He also stated that “no country can lead Nigeria in corruption, except in Central Africa”. He argued that neglecting the informal sector is detrimental to the overall economy, and not favourable to the vast majority of people whose survival is dependent on the sector.

He highlighted the challenges of the informal sector, which majorly consists SMEs, to include low productivity due to low skill level, inadequate finance, and lack of support from the government.

In concluding his lecture, he recommended a seven-point agenda that could assist in harnessing the benefits embedded in the informal sector. The agenda includes easing formality processes; understanding the workings of the sector; provision of education and skill building; incentivising and exploring the relevance of the existing tax system; provision of adequate support; purposeful and goal oriented cooperation between the government and the workers in the sector; and strengthening the link between the formal and the informal sectors.