Neo-Liberal Socio-Economic Policy And Human Development In The Informal Sector Of Lagos State

 ABSTRACT

Following Nigeria’s adoption of the neo-liberal policy symbolized by structural adjustment or economic reforms since the 1980s, the informal sector has witnessed massive growth both in form and content. However, the sector’s effective participation in national development over the last two decades has been faced with a variety of constraints including high social costs burden, lack of access to resources, markets, land and basic infrastructure. The sector is also perceived as operating in a hostile political, social, economic and institutional environment. All these challenges have adversely affected the socio-economic and working conditions of operators, resulting in the overall decline in their standards of living. Though there exists commentaries about the fate of this sector, there does not appear to be an in-depth analysis of the intersections of relevant variables that will determine the effectiveness of this sector as a catalyst for development. This study therefore investigates the socioeconomic implications of the neo-liberal policy reforms of government on the human development of operators in the informal sector. Since human development reflects achievements in the most basic human capabilities, the study evaluates the degree to which the neo-liberal policy has brought about improvement in the welfare of operators in the sector.

The study was conducted in six Local Government Areas of Lagos State. Both quantitative and qualitative methods of data collection were employed. The study utilized the survey approach through the administration of questionnaire which was complemented with Focus Group Discussions. A sample of 575 respondents was selected for the study using the systematic sampling technique. The quantitative data were analyzed using the chi-square test. The institutional theory was used to explain the nature of the Nigerian state and its implications for addressing the basic social needs of the people which indeed remain the core of development.

The findings of the study established that the neo-liberal policy on social service expenditures, subsidy removal, interest/exchange rates, trade liberalization and oil sector deregulation had an adverse influence on the demand and supply sides of

informal sector operations. These measures did not only aggravate the poverty state of operators but also invariably undermined human development in the sector. The chi-square test shows that there was a significant association between neo-liberal policy measures and the decline in the socioeconomic conditions of operators (281.41 at p < 0.05), performance (171.47 at p < 0.05), and social welfare (39.50 at p < 0.05).

The study concludes that for human development to occur in the informal operators, the country needs a developmental state where the leadership and policy makers would see the investment in the people as the central element in the entire development process. The study further recommends the development of a bottom-up policy approach that will incorporate the informal sector into the mainstream economy by harnessing its comparative advantage; besides removing the discriminatory legislations and regulations that hamper the growth of the sector. Furthermore, for the national economy to achieve sustained development, investment must be channeled toward the provision of inputs, raw materials, infrastructure and social services. This is the basic ingredient for stimulating economic growth, productivity of labour and incomes in the informal sector. In all, for the Nigerian state to achieve any meaningful economic development that would advance human development, its policies and programmes must engage and incorporate the genuine participation of the end beneficiaries, recognizing and respecting their needs and priorities.