The Lagos State government, recognizing the significant but often overlooked contribution of the informal sector to the state’s economy, has embarked on a mission to gather precise data on its performance. This initiative, spearheaded by the Lagos Bureau of Statistics in collaboration with the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), aims to accurately reflect the sector’s impact on the state’s Gross Domestic Product (GDP). The drive for accurate data underscores the government’s understanding that the informal sector, while vibrant and dynamic, has not been adequately represented in official economic statistics, hindering effective planning and policy formulation. This data gap limits the ability to fully harness the sector’s potential for growth and its integration into the broader economic framework.
The importance of the informal sector was emphasized during a two-day Stakeholder’s Forum held at the Lagos Chamber of Commerce and Industry (LCCI) in Ikeja. The forum, themed “Performance of Economic Data in Lagos,” brought together key players from the informal sector and government representatives to discuss the challenges and opportunities associated with data collection and analysis. The Permanent Secretary of the Ministry of Economic Planning and Budget, Olayinka Ojo, acknowledged the critical role of the informal sector in providing livelihoods for millions and contributing substantially to the GDP. However, she pointed out that despite its importance, the sector remains underrepresented in economic data, limiting its potential and hindering effective economic planning.
Ms. Ojo highlighted the sector’s resilience, ingenuity, and adaptability, often thriving even in challenging economic climates. This resilience, she argued, makes accurate data collection even more crucial for understanding the sector’s dynamics and leveraging its strengths for sustainable economic development. The lack of reliable data obscures the true picture of the state’s economy, making it difficult to design targeted interventions and support programs for the informal sector. By capturing accurate data, the government aims to unlock the full potential of this vibrant sector and integrate it more effectively into the formal economy.
Dr. Olubunmi Kole-Dawodu, the Lagos Manager of SMEDAN, further reinforced the importance of the informal sector, citing its significant contributions to employment creation, revenue generation, and income generation. He emphasized the need to harness the “blessings” of this sector, acknowledging that it has been largely overlooked in official economic assessments. The drive for accurate data, according to Dr. Kole-Dawodu, is a crucial step towards a more holistic understanding of the state’s economy.
The goal of the data collection initiative, as explained by Dr. Kole-Dawodu, is to introduce a degree of structure into the informal sector and provide the state government with a comprehensive view of its operations. This structured approach will enable a more accurate computation of the state’s GDP, reflecting the true contribution of the informal sector. The initiative signals a shift towards a more inclusive approach to economic planning, recognizing the informal sector not just as a marginal activity, but as a vital engine of economic growth and development.
The Lagos State government’s focus on data collection in the informal sector is a vital step towards evidence-based policy making. By gaining a deeper understanding of the sector’s dynamics, challenges, and contributions, the government can develop targeted interventions to support its growth and integration into the formal economy. This will not only enhance the accuracy of economic data but also empower the informal sector to contribute more effectively to the state’s overall economic prosperity. The initiative represents a recognition of the interconnectedness of the formal and informal economies and the importance of a holistic approach to economic development. By bringing the informal sector into the statistical fold, Lagos State is laying the groundwork for more inclusive and sustainable economic growth.
