Entrepreneurship without capital: Silent crisis behind 50% female informal workforce

Women in Nigeria’s informal workforce are facing a funding gap, with the majority still grappling with access to finance across different states.

A new report by BudgIT, entitled ‘The State of Women’s Economic Empowerment in Nigeria,’ has shown that women entrepreneurs in Nigeria are being sidelined from accessing funding support, despite being documented in the state budget.

The informal sector refers to economic activities that are not officially regulated or registered by the government.

A BusinessDay analysis of the report shows that states such as Oyo, Adamawa, Edo, Niger, Ondo, and Bayelsa budget for women entrepreneurship but do not implement it, raising questions around women’s empowerment in the informal sector, which makes up about 50 percent of the entire informal sector.

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In 29 of Nigeria’s 36 states, women make up more than half of the informal workforce, according to the new report released Wednesday.

“Fifty percent and above of the state’s informal employment are females,” the report said.

It highlights that the system meant to support these women barely touches their lives.

For instance, the Central Bank of Nigeria’s Entrepreneurship Development Programme (CBN EDP), known as the country’s flagship entrepreneurial training and credit-linkage scheme, scored 0.25 out of 1, the lowest possible rating, for its reach among women.

In several states, less than 0.4 percent of self-employed women accessed the intervention over three years.

“With a women’s employment rate of 49 percent where 94.30 percent are self-employed and only 5.70 percent work in formal or informal sectors, the need for enhanced support for women’s empowerment is urgent,” the BudgIT report noted.

The report shows a striking pattern across 29 states. Women are the majority of informal workers, yet they remain at the margins of state and federal entrepreneurship support.

States such as Ondo, Oyo, Plateau and Borno have high proportions of women in the informal sector, but all recorded extremely low beneficiary numbers for the CBN EDP, despite the programme being present in every geopolitical zone.

In Plateau, only 3,101 women, representing 0.39 percent of self-employed women, benefited between 2020 and 2022. Borno recorded 5,399 beneficiaries, reflecting just 0.37 percent of self-employed women. Oyo’s figure stood at ,987, or 0.32 percent.

These are states where informal work is not supplementary income; it is the backbone of household survival.

The numbers show that women are working more than ever, but the support architecture around them is barely functional. The interventions designed for them exist only on paper.

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Further analysis of the report shows that 31 states claim to have intervention programmes for women entrepreneurs, and many include them in annual budget documents. Yet five states, including Adamawa, Bayelsa, Edo, Niger and Ondo, had no actual funding for women in entrepreneurship in the reviewed year.

States score high for ‘having programmes,’ yet score distressingly low on implementation, reach and financing.

These gaps not only undermine women’s efforts but also perpetuate a cycle where entrepreneurship becomes ‘a coping mechanism,’ not a pathway to economic mobility.

In the absence of funded interventions, women rely on personal savings, high-interest cooperative loans, or informal credit networks to run microbusinesses that remain perpetually small.

The report shows that 29 states have formal employment rates for women below 20 percent, far beneath the national average of 26 percent. Only seven states exceed 29 percent.

With limited entry into formal jobs where salaries, pensions and stable hours exist, women turn to the informal sector for survival. However, once in the sector, they face systemic financial exclusion that constrains their ability to scale.

The World Bank estimates that women entrepreneurs earn 66 percent less profit than men. Even in consumer-facing businesses, they earn 46 percent less.

“The opportunity is undeniable: if women had the same access to capital as men, their profits could grow by at least 25 percent,” BudgIT said.

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States consistently score one for ‘existence of programmes,’ meaning policies and plans are widely documented.

But when measuring actual beneficiaries, the nationwide score collapses to 0.25.

This gap reveals a pattern of policy without delivery— entrepreneurship support is announced, budgeted, and publicised, but rarely executed at the rate required for impact.

The BudgIT report explains that the challenge is not just a gender gap, but a financing gap with national implications. Nigeria’s economy is increasingly reliant on informal, self-employed women. But the policies intended to empower them have minimal reach.

“Support for women-owned businesses must move beyond one-off programs; there is a need for deliberate, well-structured interventions that provide women with access to finance, tailored business training, and real market opportunities,” the report urged.

Feyishola Jaiyesimi covers agriculture and environment trends at BusinessDay, Nigeria’s leading daily newspaper focused on economy and finance. Her stories draw on investigative journalism, and she has been selected for professional training by the US Embassy, Lagos, and Dataphyte. Feyishola holds a bachelor’s degree in Zoology and Environmental Biology from Ekiti State University.

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