The Problems of Management of Informal Sector Activities: A Case Study of Ikwo Local Government, Ebonyi State, Nigeria

Abstract

There have been growing concerns about the persistent rise in the size of the informal sector given the troubles and difficulties it presents the government in keeping an actual record of all economic activities in the state. This study investigated the reason behind this continuous rise and how this continuous rise has affected the management of informal activities in Ikwo Local Government. Adopting the Binary Logistics Regression (BLR) model, the study analysed a cross sectional dataset obtained from 200 informal sector operators. Based on the result of the empirical findings, the study discovered that government policies was a major factor that pushed individuals into the informal sector and that the persistent rise in the size informal sector was a strong factor that have made managing the sector difficult for the government. Therefore, the study established that if the government can reduce its tax rates, cut down a bit on the bureaucratic protocols in the formal sector, many informal operators will be encouraged to operate in the formal sector and thus contribute maximally to the overall economy of the state.