Only 22% of Nigerian informal businesses use internet in their daily business operations – NBS

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Only 22% of Nigerian informal businesses use internet in their daily business operations – NBS

A recent report, released by the National Bureau of Statistics in partnership with the United Nations Development Programme on the impact of COVID-19 on Nigerian business, has revealed that only 22% of Nigerian informal businesses use the internet for their daily operations.

This is quite low, despite the fact that about 85% of the informal enterprises covered in the survey make use of mobile/smartphones in their day-to-day business operations.

According to the report, 85% of informal businesses in the country make use of phones as opposed to 92% formal businesses, while an aggregate of 90% of the enterprises in Nigeria adopts the use of mobile or smartphones in their daily operations.

However, in terms of internet adoption, 56% of the formal businesses adopt the internet against the 22% of informal businesses, while 47% make use of the internet on the aggregate. If there was anything the covid-19 pandemic has taught the world, it is that we can work from anywhere and the world is indeed a global village.

During the covid-induced lockdown, businesses were forced to close down while others could operate remotely based on their operandi. Remote working necessitated the use of the internet as means to communicate and ensure the smooth running of the business. The pandemic exposed Nigerian businesses to the usefulness of online tools such as Zoom, Microsoft Teams, Google meeting, amongst others, which helped ensure continuous communication, especially in the formal sector.

The report also highlighted that only half of the businesses in the country make use of computers for their daily operations, with only 21% from the informal sector, quite understandably though. It would be surprising to see a mechanic, barber, shoemaker, or any other business within the informal confines operating with a computer.

Also, only 40% of the businesses make use of social media for their operations while 62% make use of mobile banking. The report indicates that the adoption rate of Nigerian informal businesses towards internet innovation is still quite low, despite the reality of digitization that covid-19 exposed the world to.

Methodology of the survey

According to the report, the National Integrated Survey of Establishment (NISE) frame was used for the selection of all establishments that were considered in the study.

A nationally representative sample of 3,000 establishments which cut across both formal and informal sectors from urban and rural areas was selected. This figure comprises 2,100 formal businesses, representing 70% of the total establishments selected, and 900 informal businesses, representing 30% of total establishments.

The 70/30 distribution across both sectors was informed by several factors among which are their contribution to the Gross Domestic Product (GDP), the composition of the frame at the disposal of the Bureau, and the response status of respondents from previous establishment surveys.

The primary criterion adopted for delineating business sectors into formal and informal establishments for this survey was business registration with the Corporate Affairs Commission (CAC). Employment size, registration status and response status of the enterprise in previous surveys were also considered for the sample selection.

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