Minister of Industry, Trade, and Investment, Jumoke Oduwole Nigeria’s 25 per cent increase in non-oil exports in 2025 underscores the expanding influence of informal trade in supporting economic growth, with the African Development Bank projecting that greater formalisation could accelerate expansion through improved productivity, writes ARINZE NWAFOR Nigeria’s non-oil exports rose to $9.32bn in 2025, representing a 24.93 per cent increase from the $7.46bn recorded in 2024, as the country intensified efforts to diversify export earnings and capture greater value from informal trade activities across the economy.
Data obtained from the Central Bank of Nigeria’s Q4 2025 Statistical Bulletin showed that the country’s non-oil export basket recorded broad-based growth across electricity exports, informal trade, re-exports and other non-oil products, highlighting the increasing role of non-crude sectors in Nigeria’s external trade position.
The data showed that electricity exports rose 33.72 per cent to $236.07m in 2025 from $176.54m in 2024. Other non-oil exports, which accounted for the largest share, increased 24.13 per cent to $7.96bn from $6.42bn in the previous year. Informal trade under the informal cross-border trade statistics framework grew 29.73 per cent to $252.86m from $194.91m, while re-exports climbed 27.14 per cent to $860.54m from $676.85m.
The latest figures emerged as policymakers and development institutions intensified calls for African economies to integrate informal markets into formal economic systems to improve productivity, increase government revenue and accelerate economic growth. According to the African Development Bank’s African Economic Outlook 2026 report, Nigeria remains among African countries where the informal sector accounts for more than half of GDP, underlining the significant role unregistered businesses and cross-border traders play in economic production and livelihoods.
The AfDB warned that despite its contribution to employment and commerce, informality carries substantial macroeconomic costs through weak domestic revenue mobilisation, reduced financial inclusion and slower productivity growth. The report stated that a 10-percentage point reduction in the size of the informal sector could increase annual GDP growth in emerging and developing economies by between one and two per cent through higher productivity, improved financing access, stronger property rights and reduced market distortions.
Informal expansion The rise in informal trade exports reflects growing commercial activities across Nigeria’s land borders and regional trade corridors, especially under the African Continental Free Trade Area framework, analysts say. Informal trade, particularly among small-scale merchants, agricultural producers and border communities, has historically operated outside formal reporting systems due to weak infrastructure, high compliance costs, multiple taxes, and cumbersome customs procedures.
However, recent efforts by government agencies to strengthen trade documentation, expand digital systems and improve regional trade coordination appear to be gradually bringing parts of the sector into measurable economic activity. The AfDB noted that informality differs across African economies depending on structural transformations, state capacity, and the design and enforcement of business regulations, taxation systems, and labour market rules.
According to the bank, countries with large informal sectors often struggle to capture adequate tax revenue because transactions and incomes generated outside formal systems remain difficult to monitor. The report stated, “Each percentage point of GDP produced in the informal sector is associated with a loss of between 0.17 and 0.41 percentage points of GDP in tax revenue.” For Nigeria, where fiscal pressures continue to mount amid debt servicing obligations and infrastructure deficits, the formalisation of informal trade is increasingly viewed as a major opportunity to expand government revenue without imposing excessive new taxes on compliant businesses.
Development economists argue that integrating informal traders into formal systems could improve productivity and competitiveness by giving businesses better access to banking services, insurance, credit facilities and legal protections. Finance access One of the biggest constraints facing informal businesses in Nigeria is limited access to affordable finance.
Most informal traders and small businesses operate outside banking systems and lack proper transaction histories, audited financial records or verifiable collateral, making it difficult for them to access credit from commercial banks and development finance institutions.