Olusegun Vincent, a professor of Accounting and Corporate Finance at Pan-Atlantic University (PAU), Lagos, has warned against conflating Nigeria’s informal economy with small and medium-sized enterprises (SMEs, emphasing the conceptual mix-up could lead to misguided policies. Vincent made this known while delivering his lecture titled “Deconstructing Nigeria’s Informal Economy: Tax Haven or Emerging Enterprise Ecosystem: Interrogating the Promise of the 2025 Tax Reforms,” at the Pan-Atlantic University’s 25th inaugural lecture.
He emphasised that such a policy error could undermine efforts to effectively address the distinct challenges facing Nigeria’s informal economy and SMEs. The financial and economic expert challenged the conventional view of the informal economy as merely a reservoir of tax evasion. “The conventional view of the informal economy is a complex and heterogeneous ecosystem comprising survivalist enterprises, micro and small businesses, entrepreneurs, traders and, in some cases, sophisticated actors who deliberately remain informal.
“Policymakers must first understand the nature, drivers and dynamics of informality, distinguishing necessity-driven, structural and voluntary forms, before designing effective strategies,” he said. Vincent cautioned against treating the informal economy and SMEs as interchangeable concepts, noting that this conceptual confusion has led to policy misdirection.
“Sustainable domestic revenue mobilisation requires more than simply expanding the tax net; it demands approaches that encourage appropriate formalisation, support enterprise development, improve voluntary compliance, and strategically integrate the informal sector into the formal economy,” he noted. Besides, the lecture interrogated whether the 2025 Tax Reforms will treat the informal economy primarily as a tax haven to be captured or as an emerging enterprise ecosystem to be nurtured and constructively engaged.
Enase Okonedo, the vice-chancellor at Pan-Atlantic University, had earlier in her introduction described Vincent as a scholar whose career uniquely combines academic excellence with extensive professional and public-sector experience in accounting, taxation, finance, corporate governance and sustainability.