The informal sector in Nigeria currently accounts for 35 percent of Gross Domestic Product (GDP) or $178.5 billion. Also, the informal sector contributes 80 percent of the labour force in Africa.
According to World Bank, the informal economy refers to economic activities and income that are partially or fully outside of government regulation, taxation, and observation. 
Though often misconstrued, the black market is not equivalent to the informal economy, but is rather a subset of the informal economy dealing with contraband goods or services.
Bismarck Rewane, chief executive officer of Financial Derivatives in a monthly publication said, the contribution of the informal sector is significant and should not be over- looked. 
Currently, the informal sector of Nigeria is about 35 percent of total GDP. This is more material and significant in Lagos, the national commercial hub, with an estimated informal sector of $48.2 billion as at 2012. The informal sector’s contribution to the work force is also notable. According to African Development Bank, the informal economy contributes 80 percent of the labour force in Africa. Ninety percent of rural and urban workers have informal jobs in Africa, with most of them being women and youth. 
Due to the relative nascent state of government in most developing countries, especially in SSA, the informal economy is large in size and its contribution should not be overlooked. 
However, the lack of structure largely results to a labour environment charac- terised by low unsecure income, zero employment benefits, and lack of social protection. Popular opinion would suggest that organizing and recognizing the informal sector will contribute posi- tively to economic development. Possible benefits from “formalizing” the informal sector will include better access to financing, government awareness, and improved information.
Unfortunately, most informal businesses prefer to diversify their interests rather than attempting to become formal for various reasons. This leaves the onus on the Nigerian government to create a framework that will coax most informal businesses to integrate into the formal sector. This will help the government with national planning as well as generating a larger tax base while protecting the citizens and residents of the country.