Informal sector key for job creation, economic growth — Don

Nigeria’s everyday economy, built around small businesses and informal enterprises, creates far more direct employment than the large companies that dominate public attention, University of Lagos professor Kenneth Amaeshi said.

Amaeshi, a Chair in Business Ethics at UNILAG, made the argument during the inaugural FirstBank Samuel Asabia Professorial Chair in Business Ethics Public Lecture. His lecture, titled “Ethical Paradoxes, Small Businesses, and the Informal Economy: Lessons for Tax Compliance and Accountability,” examined the relationship between small businesses, taxation and public trust.

He said banks and capital-market firms often receive attention and government support during crises, but account for only a small share of direct employment compared with micro-enterprises in urban and rural communities. Using FirstBank as an example, he said the bank employed about 30,000 people directly, or possibly between 50,000 and 60,000. If roughly 30 Nigerian banks employed similar numbers, he said, they would account for about 600,000 direct jobs, leaving most Nigerians dependent on the wider informal economy.

Amaeshi supported formalising informal businesses because it could improve access to finance, technical assistance and structured support. But he warned that rigid, uniform taxation could create friction. Small-business owners, he said, were not inherently opposed to contributing to national development. Their concern centred on whether authorities used tax revenue transparently and accountably.

“Most of the small business owners are cognisant of their tax responsibilities, but taxpayers’ concerns about how taxes are used point to one thing: tax accountability matters. If you want more money from us, show us how you spend money,” Amaeshi said.

FirstBank Group CEO Olusegun Alebiosu said the informal sector contributes approximately 42.5% of Nigeria’s gross domestic product, citing National Bureau of Statistics data.

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Most of the small business owners are cognisant of their tax responsibilities, but taxpayers’ concerns about how taxes are used point to one thing: tax accountability matters. If you want more money from us, show us how you spend money.