By OBI DAVIES

Nigeria’s $5.18bn Gig Economy Boom Masks a Deeper Manufacturing Crisis

NIGERIA’S expanding gig economy has opened new income opportunities for millions of people, particularly young Nigerians who increasingly use digital platforms to find work, sell services and reach international clients. From ride-hailing drivers and online freelancers to content creators and livestreamers, a growing number of citizens now depend on flexible work to survive an increasingly difficult economic environment.

Yet, beneath the impressive growth of this digital marketplace lies a troubling contradiction. While online platforms create new millionaires and provide households with alternative sources of income, factories are closing, manufacturers are struggling with rising production costs and industrial employment remains under pressure.

The estimated $5.18 billion gig economy therefore tells only part of Nigeria’s economic story. It demonstrates the resourcefulness of workers responding to limited opportunities, but it also raises questions about the country’s productive capacity, the quality of available jobs and the long-term sustainability of an economy increasingly dependent on informal and platform-based work.

With an estimated three million Nigerians participating in the gig economy and more than 116 million people within the working-age population, the challenge is not to undermine digital employment. Rather, Nigeria must build an economy in which digital opportunities complement productive industries instead of becoming a substitute for the factories, farms and businesses needed to generate stable employment and long-term growth.

The human face of Nigeria’s digital employment boom

For Terver Iyohen, a 46-year-old Lagos resident and father of three, the gig economy became a means of survival after he lost his job at an insurance company in 2023.

A graduate of Business Administration from the University of Lagos, Iyohen now works with a ride-hailing company, transporting commuters across Lagos State. Week after week, he moves between destinations, picking up and dropping off passengers in an attempt to provide for his family.

Although the work gives him an income, he says the earnings barely meet his household needs. Nevertheless, with no alternative source of livelihood, he continues to drive with determination.

His experience captures one side of Nigeria’s expanding gig economy: the growing number of people who turn to flexible work not necessarily because they prefer it, but because conventional employment has become difficult to secure.

For others, however, digital work has opened access to opportunities beyond Nigeria’s domestic labour market.

Cross River State-born Ushie Ekunke, for instance, secured several roles with international companies after losing his regular job in 2022. He said he spent a year submitting more than 20 applications without success before friends introduced him to online employment platforms, including We Work Remotely, careerhound.io, grid.com and safetywing.com.

According to Ekunke, his mobile phone and Dell laptop became the tools through which he rebuilt his income. Although he acknowledged problems such as exploitation, inadequate worker protection and extended working hours, he said earning in foreign currency changed his financial circumstances in an economy where the naira had lost considerable value.

His experience reflects a wider shift in the global labour market. Jobberman reported in the previous year that 62 per cent of international companies were recruiting African youths for full-time remote positions or through freelance platforms.

Furthermore, Nigeria ranked sixth globally as an offshore outsourcing destination in the 2026 Global Outsourcing Talent Index, according to the source report. That position points to the growing recognition of Nigerian talent in the international digital labour market.

From online creators to digital entrepreneurs

The gig economy extends beyond conventional freelancing and remote employment. It also includes content creation, livestreaming, digital advertising, online commerce and the monetisation of personal brands.

Medical doctor Chinonso Egemba, popularly known as Aproko Doctor, illustrates how professionals can use digital platforms to reach large audiences while developing commercial and institutional partnerships.

Through a distinctive communication style that combines Pidgin English, humour and health education, he has attracted millions of followers across X, formerly Twitter, Instagram, YouTube and Facebook. His audience extends beyond Nigeria to other parts of West Africa and the African diaspora.

As his influence has grown, his operations have expanded to employ as many as 20 staff members. He has also secured corporate endorsements and collaborations with health organisations at international, national and subnational levels.

Among the partners identified in the source report are the Lagos State Primary Health Care Board, the World Health Organisation and health product manufacturers. These relationships demonstrate how digital influence can create opportunities beyond individual content production, including public health communication and campaign delivery.

Similarly, Habeeb Hamzat, popularly known as Peller, has built a substantial online following through comedy, youth-oriented entertainment and livestreaming. His content draws heavily on Generation Z culture, while thousands of viewers reportedly watch some of his live sessions simultaneously.

Hamzat has disclosed that he earns between ₦15 million and ₦20 million weekly from livestreaming. He also uses the visibility generated by his online activities to secure brand placements and commercial collaborations.

More importantly, his model demonstrates how creators can generate income directly from digital audiences rather than relying exclusively on corporate sponsorships.

However, the success of prominent creators should not obscure the conditions facing ordinary digital workers. While a small number of personalities earn substantial incomes, many others struggle with inconsistent payments, platform restrictions, unstable demand and limited access to social protection.

Consequently, the earnings of high-profile creators cannot be treated as representative of the experience of millions of people participating in the gig economy.

A $5.18 billion market built on economic adaptation

Nigeria’s gig economy has expanded rapidly over approximately the past decade, supported by smartphones, computers, internet access and digital platforms that connect workers with customers across geographical boundaries.

The sector includes high-skill technology services, creative industries, digital commerce, remote employment and micro-tasks. It also covers ride-hailing, delivery services, e-commerce and other forms of flexible work.

The source report estimates the market’s value at $5.18 billion, with approximately three million Nigerians earning their livelihoods within the ecosystem.

E-commerce accounts for about 38 per cent of participation, while ride-hailing represents nearly 24 per cent. Freelancing, delivery services and micro-tasks make up the remaining share.

Beyond these activities, digital workers increasingly earn foreign exchange through international clients, online knowledge services, digital products, content creation and dropshipping.

The sector reportedly contributes about 2.8 per cent to Nigeria’s Gross Domestic Product. Although that contribution is significant, its wider importance lies in the income it provides to households that might otherwise depend on scarce conventional employment opportunities.

Official data cited in the report from the National Bureau of Statistics and the International Labour Organisation place Nigeria’s working-age population at approximately 116.6 million to 118 million. This represents about 54 per cent of the country’s total population.

Of that group, between 76.3 per cent and 79.5 per cent are estimated to be economically active. The report also puts the employed population at approximately 84.1 million, with well over 90 per cent of employed people working outside formal wage structures.

These figures underline the pressure facing the domestic labour market. They also help explain why digital work has become an important source of income for people who cannot find stable employment in conventional businesses.

Nevertheless, a large workforce cannot rely indefinitely on individual hustle and informal opportunities. The economy must create productive jobs at a scale that matches the country’s demographic realities.

The digital boom & the decline of industrial capacity

The expansion of digital work is occurring alongside mounting difficulties in Nigeria’s manufacturing sector. That coincidence raises a deeper economic question: why are flexible online activities attracting more attention while the industries that produce goods, employ workers and build domestic productive capacity continue to struggle?

Manufacturing and agro-processing provide economic benefits that extend beyond the immediate wages paid to employees. They create demand for raw materials, transport, packaging, logistics, maintenance, professional services and other supporting activities.

A functioning factory can therefore stimulate employment and business opportunities across several sectors. By contrast, although gig work can provide valuable income, its benefits may remain concentrated around individual workers and the platforms through which they operate.

The imbalance becomes more troubling when manufacturers face high energy costs, unreliable electricity, poor infrastructure, inflation, insecurity, inconsistent policies and limited access to affordable credit.

According to data from the Manufacturers Association of Nigeria cited in the report, more than 800 formal manufacturing companies had shut down or left the country between 2020 and 2026, following distress experienced by about 350 others.

The Organised Private Sector had also reported that at least 61 major multinational and large domestic companies exited or divested from Nigeria between 2020 and late 2024.

Some companies did not close their entire businesses but shut down local factories. Meanwhile, unsold inventories reportedly rose to ₦350 billion during the period, while foreign-exchange difficulties and other economic pressures contributed to the exit of pharmaceutical companies such as Sanofi Nigeria Limited and GlaxoSmithKline.

Other companies identified in the report include Unilever Nigeria, Procter & Gamble Nigeria, Shoprite Nigeria, Equinox Nigeria, Bolt Food and Jumia Food Nigeria.

The report also lists Microsoft Nigeria, TotalEnergies Nigeria, PZ Cussons Nigeria, Kimberly-Clark Nigeria and Diageo among prominent companies that departed, divested or changed their Nigerian operations in 2024. These developments reflect the pressure facing businesses operating in an environment of high costs and currency volatility.

The consequences extend beyond corporate balance sheets. When factories close, workers lose jobs, suppliers lose customers and communities lose economic activity. Government revenue may also come under pressure as formal businesses reduce operations or leave the market.

Economic growth figures conceal industrial weakness

Nigeria’s headline economic growth figures do not necessarily reflect the condition of every sector. Indeed, the National Bureau of Statistics’ second-quarter 2026 GDP report, as cited in the source, presents a striking contrast between overall economic expansion and the performance of manufacturing.

Although the economy grew by 4.43 per cent in the second quarter, manufacturing’s contribution to real GDP reportedly declined to 7.72 per cent from 9.57 per cent in the first quarter.

The Manufacturers Association of Nigeria also expressed concern that industrial growth had weakened significantly. According to the association, industrial growth fell from 7.46 per cent in the second quarter of 2025 to 3.96 per cent in the corresponding quarter of 2026.

MAN’s Director-General, Segun Ajayi-Kadir, attributed the slowdown partly to the performance of the electricity, gas, steam and air-conditioning supply segment, which contracted by 10.63 per cent during the quarter.

He also pointed to the decline in manufacturing’s contribution to real GDP and the moderation of real manufacturing growth from 3.29 per cent in the first quarter of 2026 to 3.24 per cent in the second quarter.

These figures suggest that growth in the wider economy can coexist with difficulties in productive industries. When services expand while manufacturing loses ground, headline growth may conceal structural weaknesses that threaten long-term employment and domestic production.

For that reason, economic performance should not be judged by GDP growth alone. The composition of that growth, the quality of jobs created and the capacity of domestic industries to expand production are equally important.

Inside the factory: The cost of keeping production alive

The difficulties confronting manufacturers are not merely statistical. They are visible in the daily operations of businesses attempting to remain productive despite rising costs.

At Koolscent Nigeria Limited’s factory in Iyana Ipaja, Lagos, the pressure on small and medium-sized enterprises is evident. The company supports more than 100 families through direct and indirect employment, yet its management continues to struggle with operating costs that make profitability difficult.

Its Chief Executive Officer, Anietie Nya, identified unreliable electricity, poor roads and high interest rates as major obstacles to business growth.

He explained that these conditions make planning difficult, disrupt efficient operations and prevent businesses from expanding. High borrowing costs, he added, also limit manufacturers’ ability to scale production and compete in African and international markets.

For smaller businesses, survival often requires strict financial discipline. Nya said his company manages the pressure by using capital carefully, buying raw materials in bulk, reducing production waste and limiting credit facilities.

Although these measures can help a business remain afloat, they cannot resolve structural problems such as unreliable electricity, inadequate transport infrastructure and expensive credit.

Indeed, when companies must devote a large share of their resources to overcoming basic operating constraints, less capital remains available for expansion, innovation and employment.

The gig economy is a cushion, not an industrial substitute

Professor of Economics at the University of Uyo, Okon Joseph Umoh, described the gig economy as an important means of cushioning the hardships caused by macroeconomic shocks and economic downturns.

According to him, digital work provides flexible income and helps households cope with inflation and other forms of deprivation. However, he argued that the sector has limited capacity to achieve the wider macroeconomic objectives that a well-managed real sector can support.

These objectives include maintaining low and stable unemployment, controlling inflation, sustaining economic growth and strengthening the balance of payments.

Umoh maintained that a major industrial or agro-processing plant could generate deeper multiplier effects than individual gig employment because it creates demand across several parts of the economy.

He described gig employment as a critical and non-negotiable shock absorber for Nigeria’s immediate unemployment crisis. Nevertheless, he stressed that it cannot replace agriculture, manufacturing and other productive activities that offer stronger foundations for long-term economic growth.

He also raised concerns about the informal nature of much gig work. Many participants operate outside structured corporate tax arrangements, limiting the sector’s capacity to contribute to public revenue and institutional infrastructure development.

In his assessment, the gig economy’s immediate value lies principally in supporting household income and providing flexible cash flow during difficult economic conditions.

That distinction is important. Nigeria should preserve the opportunities created by digital work while recognising that a country cannot build a resilient productive economy solely around individual online activities.

When spiritual revival & industrial revival collide

The debate over Nigeria’s economic direction has also attracted religious perspectives. While manufacturers and economists emphasise industrial investment and productivity, some clerics have interpreted the closure of factories and the expansion of churches through a different lens.

The National President of the Pentecostal Fellowship of Nigeria and Presiding Bishop of Sword of the Spirit Ministries, Bishop Wale Oke, previously described churches occupying former industrial estates as evidence of spiritual revival.

Asked whether the development could worsen unemployment, Oke argued that spiritual transformation would ultimately benefit the country. He maintained that the growth of the Church and the spiritual well-being of Nigerians would have a positive national impact.

Similarly, Apostle Arome Osayi argued in a sermon that Nigeria’s calling was revival rather than building engines like China. He described the country as having a spiritual assignment linked to end-time missionary work and global intercession.

These statements have attracted criticism from people who believe that such interpretations could encourage economic passivity or divert attention from the practical requirements of industrial development.

The issue is not whether religious institutions contribute to society. Churches and other faith-based organisations can provide education, welfare support, community services and other forms of assistance. However, spiritual development and industrial development do not have to compete.

A country can pursue religious freedom and spiritual renewal while investing in factories, technology, agriculture and infrastructure. Therefore, the economic challenge is not to dismiss faith but to ensure that religious interpretations do not replace practical discussions about employment, productivity and national development.

Structural problems are undermining manufacturing competitiveness

Dr. Muda Yusuf, economist, policy analyst and founder of the Centre for the Promotion of Private Enterprise, identified structural weaknesses as the main factors undermining the competitiveness of Nigerian manufacturers.

The immediate past Director-General of the Lagos Chamber of Commerce and Industry pointed to dilapidated infrastructure, high energy costs, expensive electricity and substantial charges associated with clearing raw materials and other cargo at the ports.

He also identified logistics as a major production cost, noting that the removal of the fuel subsidy had significantly affected the movement of raw materials and finished products.

Furthermore, Yusuf highlighted competition from imported goods, particularly products from China. He said inexpensive imports had made it difficult for Nigerian manufacturers to compete in markets such as textiles and other consumer goods.

Although existing tax laws provide certain incentives and reliefs for manufacturers, he also expressed concern about the proliferation of taxes and charges, particularly those imposed by non-state actors.

His assessment points to a combination of challenges that cannot be solved through isolated interventions. Manufacturers need reliable power, efficient ports, affordable transport, predictable regulation and access to finance.

Without these conditions, local businesses will continue to struggle against competitors operating in more supportive production environments.

Rebuilding the real sector requires affordable credit & reliable electricity

The Lead Director of the Centre for Social Justice, Eze Onyepkere, argued that Nigeria must address the constraints that prevent businesses from increasing productivity.

He compared Nigeria’s monetary policy rate of 23 per cent, as cited in the report, with rates in South Africa, Algeria, Morocco and Kenya. He listed the respective rates as 7.25 per cent, 2.5 per cent, 2.25 per cent and 8.75 per cent.

The comparison illustrates the financing difficulties confronting Nigerian businesses. Where borrowing costs remain high, manufacturers may struggle to purchase machinery, acquire raw materials, expand facilities or finance production cycles.

Onyepkere also said electricity accounts for between 40 and 50 per cent of operating expenditure for some Nigerian manufacturing firms, compared with approximately 20 to 25 per cent in many African countries.

Such differences place local manufacturers at a competitive disadvantage. Businesses that spend more on power and financing have fewer resources available for investment, innovation and expansion.

He argued that Nigeria’s investment environment, including laws, enforcement, infrastructure and logistics, often rewards rent-seeking rather than productive activity.

Consequently, reforms must address the underlying costs of doing business rather than focus solely on encouraging entrepreneurship or celebrating the growth of online platforms.

Government & private sector must work together

Dr. Makeyoh Michael Oladun, Managing Director and Chief Executive Officer of Crystal Expertise Resources Limited, Lagos, believes that both the gig economy and the real sector have important roles in building a self-sufficient economy.

He argued that digital work could provide initial financial resources that individuals might later invest in productive businesses. If properly structured and managed, he added, the growing number of unemployed young people could also contribute to increased production.

His position highlights the possibility of linking digital entrepreneurship with industrial development. Rather than treating the two sectors as competitors, Nigeria could create pathways through which online earnings, technical skills and digital services support manufacturing and agriculture.

Nevertheless, such a transition requires an environment in which entrepreneurs can obtain finance, access markets and expand their operations. Individual savings alone cannot replace the large-scale capital required for industrial projects.

The policy choices that could revive manufacturing

Umoh called for more aggressive implementation of policies designed to reduce production costs and improve access to finance.

He proposed expanding the capital mobilisation capacity of the Bank of Industry so that manufacturers could obtain accessible, single-digit interest loans. Such funding, he argued, should target raw-material processing, machinery acquisition and manufacturing value chains.

He also called for tax consolidation and the removal of overlapping regulatory requirements imposed by federal, state and local authorities.

These proposals address some of the problems identified by business owners and economists. However, effective implementation would require clear eligibility criteria, transparent lending arrangements, adequate funding and mechanisms to ensure that loans reach productive businesses.

In addition, reliable electricity must become a central component of industrial policy. Manufacturers cannot compete effectively when they spend a disproportionate share of their operating budgets generating power.

Government should also improve roads, ports and logistics systems, strengthen policy consistency and address insecurity around production and distribution routes.

Meanwhile, private-sector operators must improve efficiency, invest in technology, develop local supply chains and strengthen workforce skills.

Oladun further argued that government should adopt a zero-tolerance approach to corruption, particularly because reviving the real sector requires substantial capital investment. Without transparency and accountability, public resources intended to support industrial development may fail to produce the expected results.

Nigeria must turn digital resilience into productive growth

The expansion of Nigeria’s gig economy demonstrates the adaptability of its people. Faced with limited formal employment opportunities, many citizens have embraced technology, international freelancing, ride-hailing, content creation and digital commerce to generate income.

That resilience deserves recognition. Digital work can provide access to global markets, encourage entrepreneurship and help households survive economic shocks.

However, the growth of the sector should not distract policymakers from the decline in manufacturing capacity. A vibrant economy needs both digital innovation and productive industries capable of creating stable jobs, processing raw materials, strengthening supply chains and generating long-term investment.

The challenge is to create a relationship in which gig work supports, rather than substitutes for, industrial development.

Ultimately, Nigeria’s economic recovery cannot depend on the ability of individuals to find another online task, secure a foreign client or attract a large social media following. It must also depend on the country’s capacity to build and sustain productive enterprises.

The $5.18 billion gig economy offers an important cushion. But without reliable power, affordable finance, functioning infrastructure and a supportive investment environment, the factories that could provide broader employment and economic stability will remain under pressure.

Nigeria needs a digital economy that creates opportunities and a real sector that creates lasting productive capacity. Neither should be sacrificed for the other.