• Wednesday, May 22, 2024
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How unemployment is defying GDP growth in Nigeria


 The unemployment rate in Nigeria has grown steadily in the last 10 years. Data from the National Bureau of Statistics (NBS) show that unemployment rate in Nigeria has almost doubled from an average of 13.1 per cent in 2000 to 23.9 per cent in 2011 of those actively looking for work. Essentially, the unemployment rate in Nigeria has almost doubled in the last decade.

The irony in the growth rate in the Nigerian unemployment figures is, however, seen in the fact that the last decade has also seen a fast-pace growth rate in Nigeria’s economic activities or output usually captured as the nation’s Gross Domestic Product (GDP). Figures from the World Bank show that in the last decade, the nation’s GDP growth rate has averaged 7 per cent per annum. The lowest growth recorded since 2003 is 5 per cent in 2005. Since 2005, Nigeria’s economic growth rate has averaged 6 to 8 per cent on a yearly basis. Economic growth rate in Nigeria has been one of the highest globally. Despite the significant growth rate in economic output within the last decade, unemployment rate has increased from a low of 11.9 per cent in 2005 to its current high of 23.9 per cent in 2011, the last date official figures are available.

What this clearly shows is that the fast-pace growth rate in economic output has been unable to create jobs as would have been expected. A July 2010 study by the NBS put the total number of Nigerians engaged in one form of economic activity or the other from which they earn income at 48.53 million. A breakdown of this number showed that majority of the working Nigerians, an average of 31 per cent, were employed in agriculture, forestry, and the fishing sector. The wholesale and retail trade sector came in second as the next highest employer of labour in Nigeria with an average of 12 million Nigerians, representing 25 per cent of the working population, engaged by the sector.

Manufacturing activities engaged an average of 5.3 million or 11 per cent of the working population, while other service activities employed an average of 3.47 million or 7.2 per cent of the working population. The mining and quarrying sector engaged the least number of Nigerians in employment, the NBS data show.

The sectoral distribution of employment perhaps explains the fact that unemployment level at 24.6 per cent is highest for Nigerians with a Higher National Diploma (HND) or a Bachelor’s degree. Considering the largely subsistence nature of the agriculture and crop production sector, Nigerians with a Bachelor’s degree are largely locked out of this sector which is also the highest employer of labour in the country.

Chances of picking a job seem to be significantly improved with a master’s degree, however, as the unemployment rate for those who have a master’s degree is just 13.7 per cent, which is the lowest figure in all categories of the unemployed based on qualification attained. Based on age group, the unemployment rate is highest among those in the 15 to 24 years age bracket, where it stands as high as 35.9 per cent, and lowest for those in the 45 to 54 age bracket, where unemployment stands at just 14.4 per cent.

Cumulatively, the unemployment rate stands at 59.2 per cent for those in the age bracket between 15 to 34 years. That is, a minimum of one of every two persons in this age bracket, which represents Nigeria’s active youth and young adult population, are not engaged in any form of productive ec onomic activity. This may have a significant bearing on the current security situation in the country and also for the future economic growth of the country.

The unemployment rate is more worrisome considering that 92 per cent of the unemployed claim that they have been out of job for more than four months, the maximum asked in the NBS survey. This indicates that many of the unemployed may have been out of job for far longer periods, which is not a good sign considering that the longer a person remains unemployed, the less likely he will get a job.

Solution to the jobless economic growth being experienced is in making the agricultural sector more attractive to the youths in the short term, while in the long term increasing the capacity of the manufacturing, mining and quarrying sectors to engage more Nigerians in the labour force. This will require investments in critical infrastructure including education, healthcare, housing, roads and water supply. Some states are already making significant efforts in this direction as will be shown in BusinessDay Research forthcoming reports on Nigerians states.

Note: If you want analysis or data on any company or any particular sector of the Nigerian economy or industry or have any other queries that BusinessDay Research Unit can help you with, kindly send a mail to [email protected]/en or call 08185193932. We can also help you with your confidential market surveys and competition analysis at a cost.



Editor, BusinessDay Research Unit



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