Informal Economy and Poverty Reduction

Abstract

The study investigated the role of informal economy and poverty reduction in selected business activities in Ogba/Egbema/Ndoni Local Government Area of Rivers State. 140 structured questionnaires were distributed across various business types in the local government out of which 120 were retrieved. The informal sector or grey economy is a business activity that falls outside the formally recognized enterprise engagement not accounted for in the National Gross Domestic Product. As result of the nature of the businesses, it becomes difficult for authorities to hold them for taxation. The study employed the primary data source for information which was a subject of combined descriptive and Ordinary Least Square analytical econometric technique. It employed the SPSS Package for the Management Sciences and Business. The analysis revealed a positive correlation between multidimensional poverty index and family size and monthly consumption among other variables employed in the survey. The findings established the necessity for infrastructural development in the rural areas, educational improvement and adequate finding or accessibility to capital among others. It, therefore, recommended the deliberate policy of government to improve the provision of basic amenities in rural areas, enhance the education facilities to cater for the needs of those in the rural areas and promote access to credit facilities.