Report: 40% of Nigerians working in informal sector are owed wages

SBM Intelligence, an Africa-focused geopolitical research firm, says 40 percent of Nigerians working in the informal sector are currently owed wages.

The research firm disclosed this in its report titled, “Between the Lines: A look into delayed & unpaid wages in Nigeria’s informal sector” released on Thursday.

The informal sector is business activities that operate outside of government regulation and are largely unregistered.

They include commercial bus drivers, artisans such as dressmakers, hairdressers, vulcanisers etc., and mainly those in the low socio-economic strata, with low skills and poor education.

Of the 3,416 respondents surveyed, the report said 40 percent were being owed wages while 60 percent were not owed.

“A major deterrent to placing demand for owed wages/salary according to respondents is a concern with losing out on the good relationship built with their principal/employers,” the report said.

“Other deterrents are the prevalence of in-kind payments, limited opportunities, loose terms of reference for work, transfer of risk to employees, parallel earnings outside salaries, and informal arrangements.”

The report also revealed that states like Ondo, Abia, Ebonyi, Plateau, Imo, Bauchi, Enugu, Oyo, Ekiti and Benue were the states with the highest percentages of informal workers who are being owed wages.

“This may be as a result of the apprenticeship system prevalent in Abia, Enugu and Imo where compensation for work is not necessarily in monetary terms, and the lines are blurred between salaries, favours and anticipation of future rewards,” the report added. 

“Bauchi, Benue, Ebonyi, Ekiti, Ondo, Oyo and Plateau still have large rural economies which favour family labour arrangements that are often not considered contracts to be followed to the letter.”

The report also said conflicts in Benue have affected productive ventures and business turnouts, leading to delayed salaries. 

SBM Intel advocates for labour laws and regulatory bodies to protect the rights of employees in the informal sector.

“Even though labour laws exist in Nigeria, they do not appear to be remotely applied to the informal sector, largely because the sector is unsupervised by unions and regulatory bodies,” SBM Intel stated.

SBM Intelligence in their previous report revealed that 98 percent of businesses in Nigeria’s informal sector pay taxes, but to non-state actors