CHAPTER ONE

INTRODUCTION

1.1              Background to the study

The informal sector covers a wide range of activities that originate from two reasons; According to International Labour organization (ILO, 2014) one reason is that, the informal sector is formed by the coping behavior of individual families in economic environment where earning opportunities are scarce. The second reason is that the informal sector is a product of rational behavior of entrepreneurs that desire to escape government regulations.

Opinions differ widely on what should be the appropriate attitudes and policies toward the informal sector. Some of the more optimistic advocates of the sector tend to present it in acceptable terms as a form of popular development, a vital source of employment and income for the poor, the seedbed of local entrepreneurship and a social exclusion (Uppal2013). According to Magbagbeola(2006) as cited in Ekpo and Umoh (2009), informal sector in Nigeria refers to economic activities in all sectors of the economy that are operated outside the preview of government regulations. This sector may be impossible, irregular, parallel, non-structured backward, underground, sub-terrene, unobserved or residual. Informal sector activities in Nigeria encompasses a wide range of small-scale largely self-employment activities most of which are traditional occupation and method of production. Other activities of subsistence nature such as retail trade, transport, restaurant, repair services, financial intermediation and household among other personal services are also part of the informal sector (Akintoye, 2008).

Observation reveals that the people of Kaduna North local government area (LGA) of Kaduna State, are predominantly farmers of the subsistence form, but a significant percentage of the population are involved informal sector’ activities which is the civil service. Many house-holds in the area are also involved in one form of informal activity or the other to support their livelihood.

Therefore, examining the relevance of these informal activities to the people is of research importance. This work shall attempt to analyze the contributions of these activities to the socio-economic development of the people of Kaduna North local government area of Kaduna State, Nigeria.

1.2              Statement of the research problem

For many years, people have been involved in informal sector that are also self-employment activities in both rural towns and central business districts (CBD) of cities. In recent times, due to increasing job insecurity in the formal sector and casualization of labour in the organized private sector, many Nigerians have taken solace in informal activities.

Despite this, the contributions of the informal sectors particularly at the local level is not properly understood, hence the absence of adequate policies for its development. Kaduna North LGA is one of the twenty three (23) LGAs of Kaduna State in Nigeria, and it is also a highly populated area, as such informal activities are expected to be thriving in the area. Looking at the high level of participation in the informal sector activities within Kaduna North local government area of Kaduna state, it is expected that a reasonable impact is being made. Despite this, no research attention (to the extent of literature search of the author) has been made in this area. This therefore leaves a research gap to be filled which calls for this research in Kaduna North LGA of Kaduna state, Nigeria.

1.3              Aim and objectives

This study aims at investigating the contributions of the informal sector activities to the socio-economic development of the study area. In order to achieve this aim, the objectives pursued are to:

1)      Characterize the informal sector activities in Kaduna North Local government area.

2)      Examine gender participation in the informal sector

3)      Identify the income and other benefits of participants in the informal sector within the study area.

1.4       Scope of the Study

This research is aimed at examining the contributions of the informal sector activities in Kaduna North LGA, the effects (positively and negatively) and also the problems faced by the participants in the informal sector. The local government has its headquarters in the town of Doka. They also have satellite villages such as Kinkino, Barnawa, Kawo, Gabassawa, and UngwanShanu. TheKaduna north local government is within the state (Kaduna) bordered by Chikun local government to the south eastern part of the state, at the south as well as Igabi local government area (Northeast) therefore, these areas are spatio economically appropriate for the study of the nature.

1.4              Justification of the Study

A deep glance at the study area and the people participating in the informal sector makes this research timely. Considering the increase in population which obviously is resulting in the increase of participants in the informal sector activities, therefore this research will assist:

1)      The government (both the local, state, and federal government) in understanding the contributions of the sector to the economy towards formulating appropriate policies.

2)      The government to improve conditions of the informal sector in order to attract more participants into the sector to reduce unemployment.

3)      The general public will find the result of this research useful since policy recommendations will suggest ways of increasing the opportunity for more people to participate in the sector thereby reducing crime rate.   

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