The National Bureau of Statistics has released its 2015 GDP report by formal and informal sector revealing that the informal sector’s share of the Nigerian economy is about 41.1%.
Nigeria’s GDP as at the end of 2015 was about N94.1 trillion out of which N38.7 trillion is from the informal and another N55.3 trillion formal. This report is confirmation that the nation’s informal sector remain a critical part of the economy thus showing the enormity of work that needs to be done to reduce this share.
Nigeria currently receives tax revenues of about N4 trillion most of which comes from the formal sector suggesting a tax to GDP on formal sector of less than 10%. Nigeria’s tax to GDP is less than 5% a far cry from what is obtainable in most developing countries. Tax to GDP for most developing countries is said to be above 20%. South Africa for example has a Tax to GDP of about 25%.
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