IWD 2025: Accelerating Actions through Equal Empowerment of Women in the formal and informal sector
The Nigerian economy, like every other economy, operates as a system in which goods and services are produced, distributed, and consumed. However, men play a more dominant role in this system compared to women.
Only 6.9% women are engaged in the formal sector, while 82.1% of Nigerian women are engaged in the informal sector, which remains largely unaccounted for in official economic data.
According to the International Labour Organization (ILO), this widespread participation in informal employment leads to a lower percentage of women in the formal labour market, which further limits the access of women to financial services, low and unstable income, and restricted growth and expansion, further worsening economic inequality.
Several factors contribute to the low participation and limited contribution of women in formal economic activities, including regulatory barriers such as government legislation, educational disparities, cultural norms, restricted access to managerial roles, and family responsibilities.
The formal sector refers to the part of an economy that operates within the legal and regulatory framework established by the government. It includes businesses and organisations that are registered, regulated, and subject to taxation, labour laws, and social security obligations.
The informal sector on the other hand, comprises unregistered and unregulated businesses, including small-scale enterprises, self-employed individuals, and household businesses that operate outside formal government oversight, often lacking legal recognition, social security coverage, or labour protections.
The Funding and Leadership Challenge
Women in the startup ecosystem often struggle with funding challenges that hinder business growth. According to The Big Deal report, female-owned startups received only 2.3% of total funding in 2023, while male-owned startups secured 85%.
The report further revealed that all-male founding teams received $1 for every $1 raised, whereas all-female founding teams received just 2.7 cents, 37 times less.
A data report shows that in Nigeria, men and women depend on three sources of income to fund their businesses.
While men mostly focus on borrowing money from financial institutions such as banks, women depend more on informal ways of sourcing for funds to fuel their businesses.
These funding disparities significantly impact a startup’s chances of success and long-term growth potential.
In terms of leadership, female representation in Nigeria’s banking sector remains low with only 26% of CEOs/Managing Directors in Nigeria being women, while men account for the remaining 74%.
At the continental level, data from the Mastercard Index of Women Entrepreneurs highlights Angola as the African country with the highest percentage of female entrepreneurs at 51.1%. Nigeria and Uganda follow closely, with 43.1% and 39.9%, respectively.
In contrast, Algeria, Morocco, and Tunisia record the lowest female entrepreneurial activity.
Bridging the Gender Gap for Economic Growth
Women’s economic empowerment is fundamental to achieving gender equality and advancing women’s rights. When more women participate in the workforce, economies expand, leading to increased economic diversification and improved income distribution for shared prosperity.
The funding gap remains one of the most significant barriers for female entrepreneurs. Women-led businesses often struggle to raise capital, hindering their ability to scale and thrive.
Funding is critical at every stage of a startup’s growth, it enables business founders to refine their strategies, hire skilled talent, establish sales channels, and maintain working capital. Without adequate financial backing, many women-owned businesses face limited prospects for long-term success.
Promoting women’s economic rights and closing gender gaps in the workforce are also essential to achieving the 2030 Agenda for Sustainable Development Goals (SDGs). Increasing educational attainment, including upskilling, and reskilling for women and girls plays a crucial role in fostering economic empowerment and driving inclusive, environmentally sustainable economic growth.
Women’s economic equality is not just a social imperative, it is also good for business. Companies that actively increase employment and leadership opportunities for women experience greater organisational effectiveness and growth, with research indicating that businesses with at least three women in senior management roles perform better across multiple dimensions of organisational success.
Thanks for reading this edition of SenorRita. It was written by Kafilat Taiwo and edited by Adijat Kareem.
Do you work at a Civil Society Organisation? Share your insights on Digital Public Infrastructure (DPI) and e-governance platforms in Nigeria. Take our 5-minute survey:
Do you work for any government agency? Share your insights on Digital Public Infrastructure (DPI) and e-governance platforms in Nigeria. Take our 5-minute survey: