Augustine Okon Jacob and Okon Joseph Umoh

DOI: 10.26480//bedc.02.2024.72.78

ABSTRACT
This study explores the grey economy in Nigeria, characterized by unregistered businesses, informal labor markets, and cash-based transactions, which significantly shape the nation’s socio-economic landscape. It examines the scope, characteristics, and impact of the grey economy on Nigeria’s development, highlighting its dual role in providing livelihoods and contributing to economic activity, especially in rural areas. However, the study also addresses critical challenges, including high unemployment rates, bureaucratic barriers to formalization, limited access to finance, and weak regulatory enforcement, which hinder the transition of informal enterprises to the formal sector. The implications of the grey economy extend to fiscal concerns, such as revenue losses due to tax evasion, and labor issues, including the lack of protections for informal workers. Moreover, the grey economy perpetuates social inequalities, leaving many excluded from state-provided benefits. The research emphasizes the need for coordinated policy action, including simplifying the formalization process, expanding access to finance, and implementing awareness and training programs. By adopting a comprehensive approach, Nigeria can enhance economic resilience, improve governance, and promote social equity, ultimately fostering sustainable national development. This study contributes valuable insights for policymakers and stakeholders aiming to navigate the complexities of the grey economy and its implications for Nigeria’s future.

KEYWORDS
Economic development, Grey economy, Informal sector, Policy challenges, Social equity