The incident took place on Tuesday in Amansea in southeastern Nigeria where local officials recently razed a number of sex workers' homes on grounds they were hosting "kidnappers and armed robbers", the Vanguard daily reported.
More than 200 of them gathered at the town's cattle market where their former homes once stood, and began setting fire to other buildings in the area.
Demonstrators said officials had destroyed their homes without giving them any notice.
"How can they destroy our houses without notice, leaving behind some kiosks and canteens that belong to cattle traders?"
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There were no reports of injuries or arrests at the demonstration.
The decision to raze their homes was part of an anti-crime drive by by Willie Obiano, governor of Anambra state where Amansea is located, a regional official told various media.
"Anywhere there is brothel, criminals and kidnappers hover around," said Nathan Enemuo head of the Anambra State Urban Development Board.
Although prostitution is illegal in Nigeria, it is widespread with high levels of unemployment forcing many women onto the streets and into brothels.