The South West region has emerged as the hub of Nigeria’s informal economy, accounting for nearly one-third of all unregistered businesses across the country, according to the Moniepoint Informal Economy Report 2025, released in Abuja over the weekend.

The report revealed that Lagos alone hosts 16 percent, about one in every six, of all informal businesses nationwide, a figure equivalent to the combined total of the North East and South East regions.

The North East, meanwhile, recorded the lowest concentration of such enterprises.

According to Moniepoint, the concentration of informal businesses in the South West has grown by 2 percent over the past year, underscoring the region’s dominant role in Nigeria’s micro and small-scale enterprise landscape.

Citing 2024 data from the National Bureau of Statistics (NBS), the report noted that Lagos State recorded the highest internally generated revenue (IGR) at ?815 billion, almost four times that of the Federal Capital Territory (?211.1 billion).

The report offered a stark look into the financial realities of informal business owners, revealing that 79 percent of enterprises experienced rising costs of doing business in the past year, while 38 percent earn less than ?10,000 in daily profits.

In addition, the average monthly income for most informal businesses remains below ?250,000.

While 65 percent of informal businesses reported an increase in revenue, only 47 percent recorded profit growth due to escalating operating costs.

Cash remains dominant in transactions, with half of all payments made using physical currency despite growing adoption of electronic transfers.

Moniepoint also observed that unemployment remains the most common motivation for starting an informal business, and about four in ten informal enterprises now employ others, contributing to job creation despite their limited earnings.

The report highlighted demographic trends within the sector, noting that businesses owned by young Nigerians constitute about 38 percent of the informal economy, while ownership among middle-aged Nigerians (35–44 years) has risen to 35 percent, up from 29 percent in 2024.

Gender participation also showed a slight decline, as women now own 35 percent of informal businesses compared to 37 percent a year earlier.

Commenting on the findings, Tosin Eniolorunda, Founder and Group CEO of Moniepoint Inc., said the company is working with government agencies such as the Federal Ministry of Trade and the Corporate Affairs Commission (CAC) to simplify business registration and promote formalization.

“The average monthly income of an informal business is less than ?250,000. While this confirms what many already sensed, it highlights the need for deeper support for the millions of small enterprises that power our economy,” Eniolorunda noted.

The launch of the 2025 Edition of the Nigerian Informal Economy Report, unveiling of M – Nigeria’s First Informal Economy AI Chatbot, while commemorating and celebrating 10 years of Moniepoint’s economic impact and service to institutions, businesses, and everyday Nigerians, was the high point of the event.

The company said this was done with a view to strengthening public–private collaboration in building a more data-driven, inclusive, and digitized economy that supports the Renewed Hope Agenda of achieving a $1 trillion economy by 2030. (Nigerian Tribune)