5 - The Informal and Formal Sector Inter-linkages and the Incidence of Poverty in Nigeria: A Case Study of Ilorin Metropolis
Corresponding Author(s) : Chika A. Umar
Africa Development,
Vol. 29 No. 3 (2004): Africa Development
Abstract
Using a multiple log-linear regression analysis, this paper examines the influence of the inter-relationship between the informal sector and the formal sector of llorin on the incidence of poverty in Ilorin metropolis. The study, carried out using a structured questionnaire to 480 informal sector operators, reported that 200 and 280 of the operators are not poor and poor respectively. Based on those that are poor, their relationship (in terms of the supply of labour, supply goods and raw materials, supply of equipment, provision of financial and technical assistance) with the formal sector is used in determining their influence on the incidence of poverty in Ilorin metropolis. The incidence of poverty thus proxied with their consumption-expenditure. The results obtained (with the exception of the financial linkage) show that the relationship between the informal sector and the formal sector is inversely related to the incidence of poverty, thus confirming our a priori expectations. The paper further suggests measures that would continue to make the informal sector a catalyst for poverty reduction in particular and relevant to the economic development of Ilorin in general.
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- Abumere, S.I., 1995, 'The Informal Sector in Nigeria's Development Process: Lessons from the Literature', Development Policy Center Working Paper No. 3 Adedibu, A. A, 1988, 'Measuring Waste Generation in Third World Cities: A Case study of Ilorin, Nigeria', Environmental Monitoring and Assessment, Vol, 10 No 2:89-103. African Development Bank (ADB), 2003, Gender, Poverty and Environmental Indicators in African Countries, Abidjan, ADB. Aigbokhan, B.E, 1997, 'Poverty Alleviation in Nigeria: Some Macroeconomic Issues', in Proceedings of the Nigerian Economic Society Annual Conference on Poverty Alleviation in Nigeria, Ibadan, NES: 181-210. Braun, J. and Loayza, N.V, 1994, Taxation, Public Services, and the Informal Sector in a Model of Endogenous Growth', World Bank Policy Research Working Paper No 1334.This content downloaded from 154.125.121.197 on Sat, 04 Dec 2021 14:08:31 UTC All use subject to https://about.jstor.org/terms
- Ijaiya & Umar: The Informal and Formal Sector Inter-Linkages 101 Central Bank of Nigeria, Annual Report and Statement of Account, Lagos, CBN. Federal Office of Statistics (FOS), 1999. Poverty Profile for Nigeria: 1980 1996, Lagos, FOS. Federal Office of Statistics, (Various issues), National Household Consumer Survey, Lagos, FOS. Federal Office of Statistics (Various issues), Annual Abstract ofStatistics, Lagos, FOS. Foster, J., Greer, J.and Thorbecke, E, 1984, Ά Case of Decomposable Poverty Measures', Econometrica, Vol.52:761-765. Francis P, Akinwumi, J.A., Ngwu P., Nkom S.A., Odili, J., Oiamajeye J.A., Okunmadewa, F. and Shehu, D.J, 1996, 'State, Community and Local Development in Nigeria', World Bank Technical Paper, No 1440. Fluitman, F., eds. 1989. Training for Work in the Informal Sector, Geneva, ILO. Friedmann, J., 1996, 'Rethinking Poverty: Empowerment and Citizen Rights', International Social Science Journal, No. 148:161-172. Glewwe, P., 1990, 'Improving Data on Poverty in the Third World: The World Banks Living Standards Measurement Study', World Bank Policy Research Working Paper No. 416. Grey-Johnson, C, 1992, 'The African Informal Sector at the Crossroads: Emerging Policy Options', Africa Development, Vol. XVII: 65-92. Grooteart, C, 1986, 'Measuring And Analysing Levels of Living in Developing Countries. An Annotated Questionnaire', World Bank Living Standards Measurements Study Working Paper, No 24. Grooteart, C, and Braithwaite, J., 1998, 'Poverty Correlates and Indicator Based Targeting in Eastern Europe and Former Soviet Union', World Bank Policy Research Working Paper, No 1942. Hart, K., 1973, 'Informal Income Opportunities and Urban Employment in Ghana', The Journal of Modern African Studies, Vol. 11, No. 1:61 -89. Herchbach, D.R., 1989. 'Training and the Urban Informal Sector: Some Issues and Approaches', in Fluitman, F., ed., Trainingfor Work in the Informal Sector, ILO, Geneva. Ijaiya, G. T., 2002, The Role of the Informal Sector in Minimizing Poverty in Ilorin Metropolis. Unpublished Ph.D Thesis, Department of Economics, Usmanu Dan Fodiyo University, Sokoto, Nigeria. International Labour Organization (ILO), 1972, Employment, Income and Inequality: A Strategy for increasing Employment in Kenya, Geneva, ILO. Kankwanda, M. L., Greogoire, H., Legros and H. Ouedraogo, 2000, Poverty Eradication: Where Stands Africa! London, Economical. Lanjouw, P., 1998, 'Ecuador's Rural Non-farm Sector as a Route out of Poverty', World Bank Policy Research Working Paper, No 1904. Levy, S., 1991, 'Poverty Alleviation in Mexico', World Bank Policy Research Working Paper No.679. Loayza, N.V., 1994, 'Labor Regulation and the Informal Economy', World Bank Policy Research Working Paper No 1335.This content downloaded from 154.125.121.197 on Sat, 04 Dec 2021 14:08:31 UTC All use subject to https://about.jstor.org/terms
- Africa Development, Vol. XXIV, No. 3, 2004 Morgan, D., 1989, 'Micro Enterprises and their Role in the Development Process', Courier No. 115. Narayan D., Peter R., SchaffK., RademacherΑ., and Koch-Schulte S., 2000, Voices of the Poor: Can Anyone Hear Us? Oxford University Press, New York. National Population Commission (NPC), 1993, Population Census 1991: National Summary, Lagos, NPC. Oyeniyi,T.A., 1997, Fundamental Principles of Econometrics, Lagos, Ceder Publication Ltd. Pearce, D., ed., 1992. Dictionaiy of Modern Economics, London, Macmillan. Ravallion, M., 1996, 'Issues in Measuring and Modeling Poverty', The Economic Journal 106:1238-1343. Sanyal, B., 1991, 'Organising the Self Employed: The Poverty of the Urban Informal Sector', International Labour Review, Vol 30 No. 1 39-56. Schubert, R., 1994, 'Poverty in Developing Countries: Its Definition, Extent and Implication', Economics, Vol 49/50: 17-40. Stearns, K.E., 1988, 'Assisting Informal Sector Micro Enterprises', Economic Impact, No 63. Trager, L., 1987, 'Re-examination of the Urban Informal Sector in West Africa', Canadian Journal of African Studies, Vol. 21 No 2:238-255. United Nations Development Programme (UNDP), 1998, Nigeria: Human Development Report 1998, Lagos, UNDP. Valadez, J. and Bamberger, M., 1994, 'Monitoring and Evaluating Social Programmes in Developing Countries: A Handbook for Policy Makers, Managers and Researchers', World Bank EDI Development Studies, Washington D.C., The World Bank. Von Hauff, M. and Kruse, B., 1994, 'Conceptual Bases for a Consistent Poverty Oriented Policy', Economics, Vol. 49/50:41-55. Wickware, D., 1998, 'The Shadow Economy', Urban Age, Vol 16, No 1: 5-6. World Bank, 1993, Implementing the World Bank s Strategy to Reduce Poverty: Progress and Challenges, Washington D.C., World Bank. World Bank, 2001, 'Attacking Poverty', World Development Report 2000/2001, New York, Oxford University Press. Yahie, 1993, 'The Design and Management of Poverty Alleviation Projects in Africa: Evolving Guidelines Based on Experience', World Bank EDI Human Resources Division
References
Abumere, S.I., 1995, 'The Informal Sector in Nigeria's Development Process: Lessons from the Literature', Development Policy Center Working Paper No. 3 Adedibu, A. A, 1988, 'Measuring Waste Generation in Third World Cities: A Case study of Ilorin, Nigeria', Environmental Monitoring and Assessment, Vol, 10 No 2:89-103. African Development Bank (ADB), 2003, Gender, Poverty and Environmental Indicators in African Countries, Abidjan, ADB. Aigbokhan, B.E, 1997, 'Poverty Alleviation in Nigeria: Some Macroeconomic Issues', in Proceedings of the Nigerian Economic Society Annual Conference on Poverty Alleviation in Nigeria, Ibadan, NES: 181-210. Braun, J. and Loayza, N.V, 1994, Taxation, Public Services, and the Informal Sector in a Model of Endogenous Growth', World Bank Policy Research Working Paper No 1334.This content downloaded from 154.125.121.197 on Sat, 04 Dec 2021 14:08:31 UTC All use subject to https://about.jstor.org/terms
Ijaiya & Umar: The Informal and Formal Sector Inter-Linkages 101 Central Bank of Nigeria, Annual Report and Statement of Account, Lagos, CBN. Federal Office of Statistics (FOS), 1999. Poverty Profile for Nigeria: 1980 1996, Lagos, FOS. Federal Office of Statistics, (Various issues), National Household Consumer Survey, Lagos, FOS. Federal Office of Statistics (Various issues), Annual Abstract ofStatistics, Lagos, FOS. Foster, J., Greer, J.and Thorbecke, E, 1984, Ά Case of Decomposable Poverty Measures', Econometrica, Vol.52:761-765. Francis P, Akinwumi, J.A., Ngwu P., Nkom S.A., Odili, J., Oiamajeye J.A., Okunmadewa, F. and Shehu, D.J, 1996, 'State, Community and Local Development in Nigeria', World Bank Technical Paper, No 1440. Fluitman, F., eds. 1989. Training for Work in the Informal Sector, Geneva, ILO. Friedmann, J., 1996, 'Rethinking Poverty: Empowerment and Citizen Rights', International Social Science Journal, No. 148:161-172. Glewwe, P., 1990, 'Improving Data on Poverty in the Third World: The World Banks Living Standards Measurement Study', World Bank Policy Research Working Paper No. 416. Grey-Johnson, C, 1992, 'The African Informal Sector at the Crossroads: Emerging Policy Options', Africa Development, Vol. XVII: 65-92. Grooteart, C, 1986, 'Measuring And Analysing Levels of Living in Developing Countries. An Annotated Questionnaire', World Bank Living Standards Measurements Study Working Paper, No 24. Grooteart, C, and Braithwaite, J., 1998, 'Poverty Correlates and Indicator Based Targeting in Eastern Europe and Former Soviet Union', World Bank Policy Research Working Paper, No 1942. Hart, K., 1973, 'Informal Income Opportunities and Urban Employment in Ghana', The Journal of Modern African Studies, Vol. 11, No. 1:61 -89. Herchbach, D.R., 1989. 'Training and the Urban Informal Sector: Some Issues and Approaches', in Fluitman, F., ed., Trainingfor Work in the Informal Sector, ILO, Geneva. Ijaiya, G. T., 2002, The Role of the Informal Sector in Minimizing Poverty in Ilorin Metropolis. Unpublished Ph.D Thesis, Department of Economics, Usmanu Dan Fodiyo University, Sokoto, Nigeria. International Labour Organization (ILO), 1972, Employment, Income and Inequality: A Strategy for increasing Employment in Kenya, Geneva, ILO. Kankwanda, M. L., Greogoire, H., Legros and H. Ouedraogo, 2000, Poverty Eradication: Where Stands Africa! London, Economical. Lanjouw, P., 1998, 'Ecuador's Rural Non-farm Sector as a Route out of Poverty', World Bank Policy Research Working Paper, No 1904. Levy, S., 1991, 'Poverty Alleviation in Mexico', World Bank Policy Research Working Paper No.679. Loayza, N.V., 1994, 'Labor Regulation and the Informal Economy', World Bank Policy Research Working Paper No 1335.This content downloaded from 154.125.121.197 on Sat, 04 Dec 2021 14:08:31 UTC All use subject to https://about.jstor.org/terms
Africa Development, Vol. XXIV, No. 3, 2004 Morgan, D., 1989, 'Micro Enterprises and their Role in the Development Process', Courier No. 115. Narayan D., Peter R., SchaffK., RademacherΑ., and Koch-Schulte S., 2000, Voices of the Poor: Can Anyone Hear Us? Oxford University Press, New York. National Population Commission (NPC), 1993, Population Census 1991: National Summary, Lagos, NPC. Oyeniyi,T.A., 1997, Fundamental Principles of Econometrics, Lagos, Ceder Publication Ltd. Pearce, D., ed., 1992. Dictionaiy of Modern Economics, London, Macmillan. Ravallion, M., 1996, 'Issues in Measuring and Modeling Poverty', The Economic Journal 106:1238-1343. Sanyal, B., 1991, 'Organising the Self Employed: The Poverty of the Urban Informal Sector', International Labour Review, Vol 30 No. 1 39-56. Schubert, R., 1994, 'Poverty in Developing Countries: Its Definition, Extent and Implication', Economics, Vol 49/50: 17-40. Stearns, K.E., 1988, 'Assisting Informal Sector Micro Enterprises', Economic Impact, No 63. Trager, L., 1987, 'Re-examination of the Urban Informal Sector in West Africa', Canadian Journal of African Studies, Vol. 21 No 2:238-255. United Nations Development Programme (UNDP), 1998, Nigeria: Human Development Report 1998, Lagos, UNDP. Valadez, J. and Bamberger, M., 1994, 'Monitoring and Evaluating Social Programmes in Developing Countries: A Handbook for Policy Makers, Managers and Researchers', World Bank EDI Development Studies, Washington D.C., The World Bank. Von Hauff, M. and Kruse, B., 1994, 'Conceptual Bases for a Consistent Poverty Oriented Policy', Economics, Vol. 49/50:41-55. Wickware, D., 1998, 'The Shadow Economy', Urban Age, Vol 16, No 1: 5-6. World Bank, 1993, Implementing the World Bank s Strategy to Reduce Poverty: Progress and Challenges, Washington D.C., World Bank. World Bank, 2001, 'Attacking Poverty', World Development Report 2000/2001, New York, Oxford University Press. Yahie, 1993, 'The Design and Management of Poverty Alleviation Projects in Africa: Evolving Guidelines Based on Experience', World Bank EDI Human Resources Division