The unemployment rate in Africa’s biggest economy has risen more than fourfold during the administration of President Muhammadu Buhari, who promised to create millions of jobs before he took the helm.
Tackling poverty in Nigeria through job creation has been a major target of the Buhari administration since 2015.
But his campaign promise of creating 24 million jobs, translating to three million annually, has fallen short as Nigeria’s unemployment rate has become one of the highest in the world.
Data from the National Bureau of Statistics (NBS) show that the unemployment rate quadrupled to 33.3 percent as of the fourth quarter of 2020 from 8.2 percent in Q2 2015. This means that the number of people without jobs rose by 280.3 percent to 23.2 million from 6.1 million, throwing millions of people into poverty.
The NBS data also show that the labour force population between the ages of 15 and 64 reduced to 69.9 million in Q4 2020 from 74 million in Q2 2015. The unemployment numbers for 2021 and 2022 are yet to be released, with the Presidential Economic Advisory Committee projecting 40 percent for 2021 while KPMG Nigeria forecast 37.7 percent for 2022.
The Nigerian Association of Small and Medium Enterprises said the number of micro, small and medium enterprises has reduced to 35 million in 2022 from 41 million in 2017.
“His target has not been achieved because over the last eight years, there have been many negative, bad and terrible policies summersaults both fiscal and monetary related, which came to combine with the COVID-19 pandemic and our epidemic challenges as well,” Abiodun Keripe, managing director at Afrinvest Consulting Limited, said.
Moses Ojo, a Lagos-based economic analyst, said the increased number of unemployed persons indicates low individual productivity, which has led to an increase in poverty and also in criminal activities.
Employment is one of the most important economic indicators used to measure the health and performance of any economy. But for Buhari’s led government, that indicator has underperformed largely due to two recessions in 2016 and 2020 which pushed up unemployment and inflation rates and eroded the disposable income of families and their purchasing power.
According to a 2021 Steve Hanke misery index, Nigeria moved up by four places to 11th out of 156 countries from 15th in the previous year, indicating that Nigerians were more miserable than they were in 2020.
Last year, the NBS put the number of Nigerians living in multidimensional poverty at 133 million, compared to 82.9 million considered poor in 2019 by national standards.
The World Bank said in its ‘Nigeria Poverty Assessment 2022’ report that many non-poor Nigerians “are only one small shock away from falling into poverty,” while those already poor could be pushed into even deeper deprivation.
It said the pandemic crisis drove up the country’s poverty rate, pushing more than five million additional people into poverty by 2022.
“One of the major factors that have worsened the unemployment rate is insecurity, which has affected the agriculture sector. And that has an impact on job creation,” Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), said.
“Secondly, the pandemic created a lot of disruption in the economy which collapsed many businesses. Even up till now, most of those businesses have not returned to business,” he said.
He added that inappropriate policies like the foreign exchange policy and the unfavourable macroeconomic environment are major problems for many businesses. “High-interest rates and energy prices are making it difficult for people to create jobs or retain existing jobs.”
On May 29, 2015, President Buhari unveiled his National Social Intervention Programme to lift 100 million Nigerians out of poverty in 10 years. N-Power was one of the job schemes created to tackle youth unemployment. In July 2019, the federal government said it had spent a total of N279 billion since it started paying the scheme beneficiaries from December 2016 to June 2019.
In 2017, Chris Ngige, minister of labour and employment, said the president has created seven million jobs since assuming office in 2015, through its N-Power programme.
In 2020, Sadiya Umar Farouq, minister of humanitarian affairs, disaster management and social development, said that since its inception, N-Power had trained over 500,000 beneficiaries in various vocational areas, which include farming, agro-processing, financial literacy, communication and digital skills.
“About 109,823 beneficiaries have gone on to set up businesses within their communities as a result of their training and time in the programme. And a total of 5.04 million Nigerians applied for the Batch C of N-Power in August,” she said.
But compared to other age groups, unemployment is the highest amongst those within the country’s younger population aged 15-34, which comprises over 65 percent of its more than 200 million people.
Data from NBS show that the number of unemployed young persons surged by 220 percent to 12.8 million in Q4 2020 from 4.0 million in Q2 2015. Other age groups like those between 35 and 44 rose by 434.4 percent to 5.3 million, 45-54 increased by 410.7 percent to 3.3 million, and 55-64 rose by 345.1 percent to 1.9 million.
“The present administration has been plagued with a lot of things like two recessions and COVID which have had a counter effect on the labour market,” Olamide Adeyeye, a human development professional, said.
Yusuf of CPPE added that the country must acknowledge some of the president’s efforts in intervention funds to support small and medium enterprises and social investment programmes, even though they are not sustainable.
“The policies have not been able to remedy the problems that were homogenous and exogenous. So, they have not helped matters,” he said.
A recent survey by Jobberman conducted between June and July 2022 showed that 65 percent of 2,228 respondents between the ages of 18-35 years old were without jobs.
“Amplified by the global economic crisis, COVID-19, insecurity, and the current political landscape, Nigeria’s labour force is undergoing significant disruptions at all levels,” it said.
According to the survey, while there is a huge exodus of talent from the country, layoffs, retrenchment, and termination of contractual work arrangements are common in many employment sectors.
The high unemployment in Africa’s most populous nation has fuelled armed robbery, banditry, and kidnapping, which have made it difficult for the government to attract the investments needed for job creation.
Many are seeking opportunities to travel abroad, fuelling a massive brain drain that is hurting the labour quality in Nigeria.
According to the British government, the number of Nigerians given sponsored study or student visas rose by 768.7 percent to 59,053 in 2022 from 6,798 in 2019.
While the number of new study permits issued by Canada to Nigeria increased by 17.8 percent to 16,195 as of December 31, 2022, the highest on record, from 13,745 in the same period of 2021.
“The pace at which this is happening is really fast. No country will grow significantly if there is a huge brain drain,” said Kemi Ogunkoya, a leadership development strategist.
The World Bank projects that by 2030, the number of Nigerian youth needing jobs will increase to 40.2 million from about 30.8 million projected in 2021, which could worsen poverty on the continent since informal sector jobs are unlikely to offer secure pathways out of poverty.
“The high rate of poverty is forcing the youths to abandon furthering their education in a higher institution to find jobs in the informal sector,” it said.
Agora Policy, a Nigerian think tank and non-profit organisation, recommends that the country needs to create at least 3.6 million net new jobs annually to get unemployment down to five percent by 2033.
“Nigeria can solve its rising unemployment challenges by resolving broader macroeconomic challenges that limit growth across the board. This includes resolving the dysfunction of multiple rates in the foreign exchange market, and refocusing the Central Bank of Nigeria on its mandate of keeping inflation at optimal levels,” it said.
It said targeted infrastructure spending in particular areas that increase the competitiveness of Nigeria’s exports can tame rising unemployment. “This would include electricity, transport, and telecommunications investments in export processing zones.”