The Trillion-Dollar Blind Spot: Digitizing Africa’s Informal Markets — Our Vision with MAKKET

By Alex Nwoko · March 18, 2026 · 9 min read

Somewhere in Lagos, a fabric trader in Balogun Market completes her 30th cash transaction of the day. No receipt. No record. No data trail. She has sold over ₦2 million worth of goods this week, but as far as the financial system is concerned, she does not exist.

Multiply her by millions. Across 55 African countries, informal markets — the open-air bazaars, roadside stalls, and neighbourhood kiosks that form the backbone of daily commerce — account for a staggering share of economic activity. Yet almost none of it is captured, measured, or connected to the formal financial infrastructure that could amplify its impact.

This is not a technology gap. It is an economic blind spot — and it is costing the continent hundreds of billions of dollars in unrealised growth, uncaptured tax revenue, inaccessible credit, and lost productivity.

85%

of sub-Saharan African employment is informal ^[1]

40–65%

of GDP across Africa is generated by the informal sector ^[2]

$331B

MSME financing gap across Africa ^[3]

97%

of Nigeria's retail sales happen through open-air markets ^[4]

1. Unlocking the invisible GDP

The economic argument for digitizing Africa's informal markets begins with a simple observation: you cannot optimise what you cannot see.

Africa's informal economy is not marginal. It generates between 40% and 65% of GDP across sub-Saharan Africa — in Nigeria, the figure reaches 65% ^[2]. MSMEs make up over 90% of businesses on the continent and contribute nearly 80% of employment ^[5]. The 44 million formal MSMEs in sub-Saharan Africa, 97% of which are micro-enterprises, represent just the visible tip of a much larger iceberg ^[3].

Yet because these enterprises operate on cash, with no digital records, their contribution remains invisible to national accounting, to financial institutions, and to the policy infrastructure that could support their growth.

The productivity dividend

When informal traders adopt digital tools, the impact on productivity is not incremental — it is transformational.

A 2023 IFC study found that African microenterprises using smartphones and computers report 2.8 times higher productivity, 6 times higher sales, and 1.9 times more employees compared to non-users. Traders using accounting software generated $4,038 per month in sales compared to just $315 for those without — a 12.8-fold difference ^[6].

A separate study of Ghanaian market women found that digital adoption drove an 88% surge in labour productivity, with female-owned businesses experiencing an even greater 107% increase ^[7].

At a macro level, research published in Telecommunications Policy found that every 1 percentage point increase in a country's digitalization index is associated with a 2.13% rise in GDP per capita across sub-Saharan Africa ^[8]. Applied across 55 countries, even modest improvements in digital adoption translate into tens of billions of dollars in economic output.

The market is growing fast. Africa's digital marketplace sector was valued at $10.25 billion in 2023 and is projected to reach $20.23 billion by 2030, growing at nearly 10% annually ^[9]. Online marketplaces alone could catalyse the creation of approximately 3 million new jobs across the continent ^[10].

2. Bridging the $331 billion financing gap

Perhaps the most profound economic impact of digitizing informal markets is not in the transactions themselves, but in what those transactions create: data.

Today, African MSMEs face a $331 billion credit shortfall ^[3]. Over half of the continent's 44 million formal MSMEs lack the financing they need to grow. For informal traders — the millions who are not even counted in that figure — the situation is far worse. No bank account, no transaction history, no credit score, no collateral. The traditional financial system was not built for them.

From invisible to investable

Digital platforms change this equation fundamentally. Every transaction recorded on a digital platform creates a data point. Aggregate enough data points and you have something that never existed before: a digital financial identity for a trader who was previously invisible to the system.

Across Africa, fintechs are already using alternative data — mobile wallet activity, transaction patterns, and digital payment histories — to build credit profiles for underserved populations who have never had a bank account. The model is proven: digitize the transaction, create the data, build the identity, unlock the capital.

Eliminating hidden costs

Beyond credit access, digitization strips out the structural inefficiencies that drain margins from informal supply chains. Today, market traders routinely close their shops to travel to wholesalers for restocking — a process that adds an estimated 7–20% in hidden transaction costs to their goods. Stockouts caused by poor distribution coverage cost leading FMCG companies 6–8% of gross sales across Africa ^[13]. Digital supply chain platforms compress these costs by connecting traders directly to suppliers, eliminating unnecessary intermediary layers and reducing lost selling days.

3. A growth engine for the AfCFTA

The African Continental Free Trade Area (AfCFTA) aims to create a single market of 1.3 billion people with a combined GDP of $3.4 trillion — the largest free trade area in the world by number of participating countries ^[14]. Full implementation could boost regional income by $450 billion, increase intra-African exports by 81%, and lift 30 million people out of extreme poverty by 2035 ^[14].

But here is the challenge: the AfCFTA's ambitions are continental, while the vast majority of African commerce — the informal markets where 85% of the workforce operates — remains stubbornly local. You cannot integrate a single African market if the markets themselves are not digitally connected.

The Digital Trade Protocol

This is why the adoption of the AfCFTA Digital Trade Protocol (DTP) in February 2024 matters so profoundly. The first digital trade agreement on the African continent, covering 54 countries, the DTP creates the legal framework for cross-border digital signatures, electronic invoicing, and paperless trade — specifically designed to bring MSMEs into the regional fold ^[15].

The projected impact is substantial:

16.9%

Potential GDP growth for Nigeria under the DTP ^[16]

$74B

Increase in digitally delivered service exports by 2040 ^[16]

$292B

Income gains from trade facilitation measures alone ^[14]

$70B

New trade value the ADAPT digital infrastructure could unlock ^[17]

PAPSS: Paying in your own currency

The infrastructure is already being built. The Pan-African Payment and Settlement System (PAPSS), launched by Afreximbank, now connects 19 countries with over 150 commercial banks and 14 payment switches ^[18]. PAPSS allows traders to pay for cross-border goods in their local currency, eliminating the heavy reliance on scarce US dollars and reducing transaction settlement times from days to minutes.

In 2025, PAPSS launched two additional innovations: PAPSSCARD, Africa's first continental card scheme, and the PAPSS African Currency Marketplace (PACM), enabling peer-to-peer exchange of African currencies ^[18]. These are the rails that will carry intra-African trade at scale — but they need digitized merchants at both ends to function.

The connection is direct: a trader in Onitsha Main Market who sells through a digital platform can, for the first time, receive payment from a buyer in Kejetia Market (Kumasi, Ghana) in naira, settled instantly through PAPSS. The AfCFTA provides the legal framework. PAPSS provides the payment rails. What is missing is the digital layer that connects the trader to the system. That is the layer MAKKET builds.

4. From informal to functionally formal

One of the most important — and least discussed — economic benefits of market digitization is the pathway it creates from informality to what might be called functional formality.

Traditional formalization requires traders to navigate complex bureaucratic registration processes — business licences, tax identification numbers, regulatory compliance. For a market trader earning ₦50,000 per day, the cost and complexity of formal registration often outweigh the perceived benefits. The result: Africa's informal sector remains informal not because traders choose to avoid the system, but because the system was not designed for them.

Digital platforms offer an alternative path. When a trader lists products on a verified marketplace, accepts digital payments, and builds a transaction history, they become functionally formal — traceable, accountable, and visible to the financial and regulatory infrastructure — without needing to navigate traditional registration.

Expanding the tax base

For governments, this represents an enormous fiscal opportunity. The UN Economic Commission for Africa estimates that Africa could increase tax revenue by $99 billion annually — equivalent to 4.6% of GDP — through tax reform and digitization ^[19]. Digital payments make it possible for revenue authorities to track and tax transactions in formerly cash-only economies without deploying armies of tax collectors into market corridors.

The key insight is that this does not have to be adversarial. When digitization also gives traders access to credit, wider markets, and payment protection, the value exchange becomes clear: the trader gets financial visibility and the tools to grow; the government gets a broader, more reliable tax base.

The mobile money foundation

The foundation for this transition already exists. In 2024, Africa processed $1.1 trillion in mobile money transactions across 1.1 billion registered accounts — representing 65% of global mobile money volume ^[20]. Mobile money added approximately $190 billion to sub-Saharan Africa's GDP in 2023 alone ^[21].

The payment infrastructure is mature. The consumer behaviour is established. What remains is to connect the last mile — the market stall, the individual trader, the product listing — to the digital economy that is already humming around them.

5. Our vision with MAKKET

This is not an abstract policy paper. This is what we are building.

MAKKET is the digital discovery and trust platform for Africa's physical markets. We started in Nigeria — with 300+ markets mapped across the country — because Nigeria presents the most complex and commercially diverse market environment on the continent. If the model works here, it works anywhere.

But from day one, MAKKET has been designed with the economic architecture described in this article in mind. Every feature is a building block in the larger financial inclusion story:

Market mapping creates the digital identity layer. When a field agent maps a trader in a specific market, that trader becomes a distinct, verifiable entity in a digital system for the first time — a specific business, at a specific location, with a specific inventory.
Multi-tier verification builds institutional trust. Each verification level adds a layer of credibility that financial institutions can rely on — the same kind of trust signal that traditional businesses take for granted.
Escrow-backed payments through licensed partners create transaction records. Every payment processed generates a data point. Over time, those data points compose a financial history — the raw material for credit scoring and working capital assessment.
Trust scores quantify reliability. MAKKET measures delivery performance, product accuracy, and customer satisfaction. This is not a vanity metric — it is an alternative credit signal, built on observed behaviour rather than collateral.
Cross-market search extends economic reach. The geographic limitation that has capped informal market growth for centuries dissolves when buyers can discover and transact with verified sellers across multiple cities.

The compounding effect: A verified trader on MAKKET is not just a seller on a platform. She is a searchable business. She has a reputation score. She has a transaction history. She has verified inventory. She has customer reviews. She is, in every functional sense, a formal business — visible to buyers, accessible to financial services, traceable by revenue authorities, and connected to the digital economy. And she achieved all of this without leaving her stall.

The bigger picture

The digitization of Africa's informal markets is not a technology project. It is an economic transformation — one that touches GDP measurement, financial inclusion, government revenue, gender equality, continental trade integration, and job creation simultaneously.

The numbers are clear:

$331 billion in MSME financing waiting to be unlocked through digital identity ^[3]
$99 billion in potential annual tax revenue from digitizing informal transactions ^[19]
$450 billion in regional income gains from full AfCFTA implementation ^[14]
$190 billion already added to SSA GDP by mobile money alone ^[21]
3 million new jobs from digital marketplaces ^[10]
2.8x productivity gains for digitally enabled micro-enterprises ^[6]

The infrastructure exists — 1.1 billion mobile money accounts, PAPSS cross-border payment rails, the AfCFTA Digital Trade Protocol. What is missing is the trust and discovery layer that connects the individual trader to the system. The layer that makes a market stall searchable. A seller verifiable. A transaction recordable. A business fundable.

That is what MAKKET builds. One market at a time. Starting in Nigeria. Designed for Africa. Built for the world.

If you believe that the world's oldest form of commerce deserves modern financial infrastructure — join us at makket.io.

Sources & References

International Labour Organization (ILO), ILOSTAT Informality Statistics (2024). 85.8% of employment in Africa is informal; 90% of employed women work in the informal sector.
World Bank / ILO (2023–2024). The informal economy generates approximately 40–65% of GDP across sub-Saharan Africa.
IFC / World Bank, MSME Finance Gap Report (2023–2025). Africa's MSME finance gap stands at $331 billion.
USDA Foreign Agricultural Service, Retail Foods Annual — Nigeria (2024). Open-air markets account for 97% of national sales of food, beverages, and personal care products.
IFC, Digital Technologies Are a Useful Yet Underutilized Tool for African Microenterprises (2023). Microenterprises using digital tools: 2.8x higher productivity, 6.0x higher sales.
Springer, Adoption Patterns and Impact of Digital Technologies Among Ghanaian Market Women (2024). Labour productivity surged 88% with digital adoption.
World Bank, The African Continental Free Trade Area: Economic and Distributional Effects (2020). Full implementation: $450 billion income boost, 81% increase in intra-African exports.
GSMA, State of the Industry Report on Mobile Money (April 2025). Africa: 1.1 billion accounts, $1.1 trillion in transactions, adding $190 billion to SSA GDP in 2023.