THE CHARACTERISICS AND CHALLENGES OF THE INFORMAL SECTOR: IMPLICATIONS OF THE COVID-19 PANDEMIC FOR SMALL AND MICRO-BUSINESSES IN LAGOS, NIGERIA

Abstract

The future of small and micro-enterprises (SMEs) in Nigeria’s informal sector has received less attention since the emergence of the COVID-19 pandemic. In this article, the challenges and characteristics of the informal sector are used as arguments for understanding the future of SMEs in this sector in the era of the COVID-19 global pandemic. The study recruited a total of 17 informal-sector SME business owners in Lagos, Nigeria. The major implications of the pandemic include reduced patronage, low financial turnout, increased operational costs, poor supply chain functions, and liquidation of many SMEs. The need to embrace innovation and strategic change management is shown as critical to the sustainability of SMEs in the informal sector. This research echoes the need for a more regulatory function of the operations of informal-sector SMEs towards addressing the challenges of the COVID-19 pandemic for small businesses.

Keywords

• informality
• covid-19
• small business
• entrepreneurship
• economics