Abstract

The informal sector plays a crucial role in Nigeria’s economy, contributing significantly to employment and economic activities. However, despite its vast potential, it remains largely untapped as a source of government revenue. This study adopts a literature review approach to examine how Nigeria can enhance revenue generation by integrating the informal sector into formal economic structures. Drawing insights from successful case studies in other economies, the paper explores key themes such as financial inclusion, development finance, economic diversification, and payment systems. It highlights how effective monetary policies, digital financial solutions such as mobile money, and targeted development strategies can bridge the gap between informal businesses and formal financial frameworks. Furthermore, the study discusses regulatory challenges, tax compliance issues, and the role of technology in improving transparency and accountability within the sector. By synthesizing recent trends and empirical findings, this paper provides actionable policy recommendations for leveraging the informal economy to drive economic growth, boost GDP, and ensure long-term national prosperity.