Nigeria’s Informal Economy: A Daily Struggle Below ₦10,000 Profit
Nigeria’s vibrant informal economy, a cornerstone of daily economic activity and employment, is facing profound challenges. A recent alarming insight from the 2025 Informal Economy Report by Moniepoint reveals the harsh financial realities for millions of small business owners. The report indicates that a significant 38% of informal businesses across the nation generate a daily profit of less than ₦10,000, underscoring a widespread struggle for financial viability among crucial economic contributors.
The Precarious Financial State of Nigerian Entrepreneurs
The figure of less than ₦10,000 daily profit, roughly equivalent to $7, paints a stark picture for countless traders, artisans, and small-scale service providers. For many, these meager earnings are often barely enough to cover essential operating expenses, let alone crucial household costs or the necessary investments for business expansion. This financial fragility is compounded by other systemic pressures. The Moniepoint report further highlights that a staggering 79% of informal businesses have grappled with increased costs of doing business over the past year. This escalation in operational expenses directly erodes already thin profit margins, pushing many informal entrepreneurs into a cycle where they work daily without the safety net of financial buffers or savings. Despite the informal economy being Nigeria’s largest source of employment, contributing over half of the national output and powering daily transactions, the data clearly shows that the individuals sustaining this vital sector are struggling to keep their heads above water.
The profound impact of these low profit margins and rising costs casts a shadow over the financial resilience of the very individuals who drive a substantial part of Nigeria’s economic engine. Understanding and addressing these challenges is crucial for fostering sustainable growth and improving the livelihoods of millions in this critical sector.
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