Owed Salaries in Nigeria’s Informal Sector: An In-depth Analysis


Nigeria’s informal sector, which constitutes a significant portion of the nation’s economy, is plagued by a chronic issue of owed salaries. A recent research reveals that 40% of workers in this sector are owed wages, exacerbating poverty and economic instability in Africa’s largest economy. This article delves into the survey findings, explores the underlying causes, and discusses potential solutions to this pervasive problem. 

Extent and Duration of Owed Salaries 

The survey conducted involved 3,416 respondents across various states in Nigeria. The data indicates that 40% of informal sector workers are owed wages, with varying durations of non-payment: 

– 1 to 3 months: 43% 

– 4 to 6 months: 29% 

– 7 to 10 months: 15% 

– 11 to 15 months: 8% 

– 16 to 20 months: 5% 

No respondents reported being owed for more than 20 months. The majority of wage delays fall within the 1 to 3 months range, but a significant portion of workers experience medium to long-term delays, which can severely disrupt their financial stability. 

Geographical Disparities 

The prevalence of owed salaries varies significantly across Nigeria’s states. States like Ondo, Abia, Ebonyi, Plateau, Imo, Bauchi, Enugu, Oyo, Ekiti, and Benue show the highest percentages of owed wages, with figures reaching up to 94% in Ondo and 92% in Abia. In contrast, states like Bayelsa, Sokoto, and Yobe reported no instances of owed salaries among surveyed workers. This geographical disparity highlights the need for region-specific interventions. 

An Infograph on Nigeria’s Informal Sector

Underlying Causes 

Several factors contribute to the widespread issue of owed salaries in Nigeria’s informal sector: 

1. Lack of Regulation: The informal sector is largely unregulated, allowing many malpractices to go unnoticed and unaddressed. The absence of formal contracts and legal protections makes workers vulnerable to exploitation. 

2. In-kind Payments: Many workers receive in-kind payments rather than monetary compensation, blurring the lines between wages, favors, and future rewards. 

3. Economic Instability: The economic downturns, exacerbated by the COVID-19 pandemic, have reduced business revenues, making it harder for employers to pay wages on time. 

4. Social Dynamics: Workers often refrain from demanding owed wages to avoid damaging their relationships with employers or losing their jobs. Additionally, many are unaware of their rights or are discouraged by the cost and time required to seek justice. 


The non-payment of wages has severe implications for the affected workers, leading to increased poverty, financial instability, and a range of coping mechanisms such as engaging in side hustles, resorting to theft, or running parallel businesses. This situation not only affects the workers’ quality of life but also hampers overall economic productivity. 

Proposed Solutions 

To address the issue of owed salaries in the informal sector, several measures can be taken: 

1. Regulation and Oversight: Establishing regulatory bodies to oversee the informal sector can help ensure compliance with wage payment obligations. Creating formal employment contracts and strengthening labor laws are crucial steps. 

2. Awareness Campaigns: Educating workers about their rights and the available legal recourse can empower them to demand fair treatment and timely payment. 

3. Support Systems: Implementing support systems such as labor unions or worker cooperatives can provide informal sector workers with the collective bargaining power needed to negotiate fair wages and resolve disputes. 


The issue of owed salaries in Nigeria’s informal sector is a significant challenge that requires urgent attention. By understanding the extent of the problem, addressing the underlying causes, and implementing effective solutions, stakeholders can work towards ensuring that all workers receive their due wages promptly, fostering a more equitable and stable labor market. 

Leave a Reply

Your email address will not be published. Required fields are marked *